Problem

Table 14.9 shows the share of income going to eac…

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Problem 6 Hard Difficulty

A group of 10 people have the following annual incomes: $24,000, $18,000, $50,000, $100,000, $12,000,
$36,000, $80,000, $10,000, $24,000, $16,000. Calculate the share of total income that each quintile receives from this income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?

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Principles of Microeconomics for AP® Courses

Chapter 14

Poverty and Economic Inequality

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Video Transcript

a group of 10 people have the following annual incomes $24,000.18,000 dollars $50,000.100,000 dollars, $12,000 very sick, $1000 $80,000 $10,000 $24,000.16,000 dollars. We want to calculate the share off the total income that each quintile receives from this in calm distribution. So, first of all, we would like to rank the house house by income from lowest to highest and girls as falls $10,000 proud $1000 $16,000 $18,000 $24,000 again, Tony for $30 $36,000 $50,000 $80,000 and asked me ah, $100,000. First of all, we would like to calculate the total that is $370,000 that is, to total income. And then, since there are 10 households total, the bottom quintile will just be the bottom two households. The second Queen tire will be the third and fourth house hose and so on, up to the top queen time. So the queen tiles and percentage for the total income for the data provided will be cock a late as the following. So, first of all, for the first Queen, tout a total income. Oh, just be. I need those two up $2000 pause, $12,000 which gives us $22,000 and same for the second queen tile. $60,000 plus $18,000. You says there'll be $4000. They're quintile is $24,000 plus $24,000 that is $48,000 but 1/4 quintile that will be $36,000 plus $50,000 and that gives us $86,000. And the fifth Queen tire will be $80,000 hose, $100,000 Which gives says $180,000. So those are the total income for each quintile, and then we want to calculate that person page off the total income. So for the first quintile it Opie Tony, $2000 over $370,000. That is the total you come, which is about 6%. But a second quintile, that will be $34,000 over $370,000 which is around 9.2% for the third quintile. That would be $28,000 body by $370,000 which is around 30%. And for the fourth Queen tile that ISS $86,000 over $370,000. That is about 23.2%. Before the fifth quintile, that will be 180 thousands over $370,000. That is about 48.6%. And then we want to know Do the top and bottom queen tiles in this distribution have a greater or larger share off the total income than a top, and a bottom queen tiles off that US income distribution. So comparing this distribution to that US in income distribution for 2000 and five, the top quintile in the example has a smaller share off total income than in the U. S. Distribution, and the bottom quintile has a larger share. So this pattern usually means that the income distribution in the example is more equal than the U. S. Distribution

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