# 1.2.3. The following is false Ifeverybodys income increases by.docx

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1. 2. 3. The following is false: Ifeverybody's income increases by a constant dollar amount, inequality must fall. The Lorenz curve must necessarily lie in the lower triangle of the diagram, bounded by the 45 degree line at the top and the axes at the bottom. The following 3 principles of inequality measurement- anonymity, population, relative income- are enough to compare any two income distributions in terms of inequality If a relatively poor person loses income to a relatively rich person, the Gini coefficient must rise. Refer to the income distributions below. In each situation, the first set of numbers represents the various incomes, whereas the second set of numbers represents the number of people earning each of these incomes. (a) (100, 200,300, 400): (50, 25,75, 25) (b) (200, 400, 600, 800); (50, 25, 75, 25) (c) (200, 400, 600, 800); (100, 50, 150, 50) (d) (100, 200, 300,400): (60, 15, 65, 35) The income distribution in (d) . . the one in
• Fall '19
• 45 degree, first set of numbers, Ifeverybody's income

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