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Draw the lorenz curves of the income distributions

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Reference no: EM132492330

The economy of Pingpong has ten people. Three of them live in the modern sector of Pingpong and earn $2000 per month. The rest live in the traditional sector and earn only $1000 per month. One day, two new modern sector jobs open up and two people from the traditional sector move to the modern sector. (show the calculation process by hand).

2A. Draw the Lorenz curves of the income distributions (Hint: before and after curves must cross).

2B. Calculate the Gini coefficients of the two distributions.

Reference no: EM132492330

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