Chapter Questions
What is meant by the terms 'income inequality' and 'income distribution'?
Explain the Lorenz curve and what it measures.
How is the Gini coefficient calculated and what does it show?
How does the extent of income inequality in your country compare to that of other nations around the world?
Poverty is described as a relative concept - what does this mean?
Distinguish between absolute and relative poverty.
When gauging the amount of inequality, why do transitory and life cycle variations in income cause difficulties?
How would a utilitarian, a liberal and a libertarian determine how much income inequality is permissible?
What are the pros and cons of in-kind (rather than cash) transfers to the poor?
Describe how anti-poverty programmes can discourage the poor from working. How might you reduce this disincentive? What are the disadvantages with your proposed policy?