Question
Lorenz Curve is given by:
dir="ltr">L(x) = 1/3 (X^3) + 2/3 (x^5). Calculate Gini Coefficient.Solution
The Gini coefficient is equal to the area below the line of perfect equality (0.5 by definition) minus the area below the Lorenz curve, divided by the area below the line of perfect equality. In other words, it is double the area between the Lorenz curve and the line of perfect equality.
Let X and Y be two related variables. The two regression lines are given by x-y+1=0 and 2x-y+4=0. The two regression lines pass through the point:
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According to the graph on the right, the equilibrium price in the market before the tax is imposed is
