A group of 10 people have the following annual incomes: $55,000, $30,000, $15,000, $20,000, $35,000, $80,000, $40,000, $45,000, $30,000, $50,000. Complete the table. IncomeQuintileShare of Income$15,000Bottom $20,000$30,0002nd $30,000$35,0003rd $40,000$45,0004th $50,000$55,000Top $80,000 If $4000 is taxed from the top earner and transferred to the lowest earner, would that increase or decrease the share of income held by the top quintile?Would this transfer increase or decrease the share of income held by the bottom quintile?Would this have any effect on the 2nd quintile? The 3rd? The 4th?Would this transfer increase, decrease, or have no effect on income inequality in this group?Redistributing income from the highest earner to the lowest one would reduce the utility of the top earner and increase the utility of the lowest earner. But what would happen to overall utility in the economy? Would it increase, decrease, or remain the same? Explain your answer. (Hint: does the marginal utility of income diminish as one earns more?)

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Answered: A group of 10 people have the following…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 6SCQ: A group 0f 10 people have the following annual incomes:...

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A group of 10 people have the following annual incomes: $55,000, $30,000, $15,000, $20,000, $35,000, $80,000, $40,000, $45,000, $30,000, $50,000. Complete the table.

Income	Quintile	Share of Income
$15,000	Bottom
$20,000
$30,000	2^nd
$30,000
$35,000	3^rd
$40,000
$45,000	4^th
$50,000
$55,000	Top
$80,000

If $4000 is taxed from the top earner and transferred to the lowest earner, would that increase or decrease the share of income held by the top quintile?
Would this transfer increase or decrease the share of income held by the bottom quintile?
Would this have any effect on the 2^nd quintile? The 3^rd? The 4^th?
Would this transfer increase, decrease, or have no effect on income inequality in this group?
Redistributing income from the highest earner to the lowest one would reduce the utility of the top earner and increase the utility of the lowest earner. But what would happen to overall utility in the economy? Would it increase, decrease, or remain the same? Explain your answer. (Hint: does the marginal utility of income diminish as one earns more?)

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A group of 10 people have the following annual incomes: $55,000, $30,000, $15,000, $20,000, $35,000, $80,000, $40,000, $45,000, $30,000, $50,000. Complete the table.

Income	Quintile	Share of Income
$15,000	Bottom
$20,000
$30,000	2^nd
$30,000
$35,000	3^rd
$40,000
$45,000	4^th
$50,000
$55,000	Top
$80,000

If $4000 is taxed from the top earner and transferred to the lowest earner, would that increase or decrease the share of income held by the top quintile?
Would this transfer increase or decrease the share of income held by the bottom quintile?
Would this have any effect on the 2^nd quintile? The 3^rd? The 4^th?
Would this transfer increase, decrease, or have no effect on income inequality in this group?
Redistributing income from the highest earner to the lowest one would reduce the utility of the top earner and increase the utility of the lowest earner. But what would happen to the overall utility of the economy? Would it increase, decrease, or remain the same? Explain your answer. (Hint: does the marginal utility of income diminish as one earns more?).

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I just need answers for the sub-part 4 and 5.

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