Consider the Following Distribution of Income in a 12-Person Economy

question 1

Essay

Consider the following distribution of income in a 12-person economy, with the modern urban
wage  3, the traditional rural income  1, and the informal urban wage  2: (1,1,1,1,2,2,2,2,3,3,3,3).The poverty line  1.25.Suppose rural incomes are raised to 1.5 through expanded agricultural exports.What happens to relative inequality? Absolute poverty? Calculate the Ahluwalia-Chenery welfare index for terciles (3 fractiles) under GNP weights and equal weights.Why is the equal-weighted index higher?

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Definitions:

Stimulant

A substance that raises levels of physiological or nervous activity in the body.

Happiness Levels

The degree or measure of a person's subjective well-being and contentment.

Having Children

The life event or choice of becoming a parent and raising offspring.

Basic Arousal States

The fundamental levels of physiological alertness and responsiveness in an individual.