In an Effort to Make the Distribution of Income More

question 41

Multiple Choice

In an effort to make the distribution of income more nearly equal, the government of a country passes a tax law that changes the Lorenz curve from for 2004 to for 2005. Find the Gini coefficient of income for both years. Round your answer to six decimal places. ​

• A) 2004: 0.331754 2005: 0.234910
• B) 2004: 0.434783 2005: 0.316194
• C) 2004: 0.268199 2005: 0.186871
• D) 2004: 0.225080 2005: 0.155144
• E) 2004: 0.630631 2005: 0.483492

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Definitions:

Level

A stage, degree, or magnitude in a hierarchical system, often used to describe intensity, development, or achievement.

Overextraction

The process of extracting natural resources faster than they can be replenished, leading to depletion or degradation of those resources.

User Cost

The cost of using a durable good or capital, considering factors like depreciation and the opportunity cost of not investing the funds elsewhere.

Extraction Cost

The expenses associated with removing natural resources from the earth or sea, including labor, equipment, and regulatory compliance costs.