A Certain Country's Income Distribution Is Described by the Function

question 130

Multiple Choice

A certain country's income distribution is described by the function Sketch the Lorentz curve for this function. Compute and and interpret your results.

• A) ; The lowest 10 percent of the people receive 1.5 percent of the total income.The lowest 30 percent of the people receive 10.1 percent of the total income.
• B) ; The lowest 10 percent of the people receive 1.5 percent of the total income.The lowest 30 percent of the people receive 10.1 percent of the total income.
• C) ; The lowest 30 percent of the people receive 1.5 percent of the total income.The lowest 10 percent of the people receive 10.1 percent of the total income.

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Definitions:

Issues Of Scale

Challenges or advantages businesses face as they expand or reduce their size or production capacity.

Multiple Rates Of Return

A situation where an investment has more than one internal rate of return due to differing cash flow patterns over time.

Required Rate Of Return

The minimum annual percentage earnings needed from an investment to make it worthwhile, factoring in risk.

IRR

An investment's IRR represents the discount rate that makes the sum of all future cash flows (positive and negative) from the investment equal to zero, effectively measuring its annual growth rate.