5.Using a Lorenz curve diagram, explain how to calculate the Gini coefficient.Answer:Examined in the text.6.Generally speaking, higher income countries tend to have less income inequality than low income countries, however this does not always hold true. What could cause a low income country to have low income inequality?
7.Discuss the benefits of using a “poverty weighted” index of GNP growth as a measure of social welfare as opposed to using the growth in GNP to measure change in social welfare.
8. The 2002 World Development Report provides the following information for Colombia and Thailand:PerCapitaGDP ($)Per CapitaGDP(PPP $)PopulationbelowNationalPoverty Line(%)Populationbelow$1 Day PPP(%)PovertyGap at$1 DayPPP (%)GiniIndexColombia2080589017.711.03.257.1Thailand2010633013.1<2<0.541.4