###### This question refers to income distribution This question refers to income distribution Question 1. This question refers to income distribution. (1) what is a Lorenz curve? Draw one, labeling the axes (2)Explain why a Lorenz curve can never lie to the left or above the 45 degree line (3)Using a Lorenz curve diagram, explain how to calculate the Gini coefficient 2. What is the Multidimensional Poverty Index and how is it a more improved measure of poverty? 3. How can you encourage people in developing countries to have fewer children? 4. Explain the reasons for the hidden momentum of population growth and state its implication for population levels. 5 what is meant by the demographic transition? What are the differences in the demographic transition between the current developed economies and developing countries? 6. Suppose the rural wage is \$1 per day. Urban modern sector employment can be obtained with 5 probability and pays \$2 per day. Will there be any rural-urban migration? Explain your reasoning, stating explicitly any simplifying assumptions, and show all work. 7. point out the main differences in job conditions and worker characteristics between the urban formal and informal sectors. 8. Describe some of the benefit and costs associated with the emergence of large cities in developing countries. 9. What is human capital and why is it crucial to expand human capital as part of the development process. 10. What are the critical health challenges facing developing countries today and what measures are being taken to confront these challenges? Explain your answer. This question refers to income distribution
September 12, 2020
###### Summarizes the reading by highlighting the main points, identifying the major arguments.
September 12, 2020

## You may use the following simplified corporate tax bracket

You may use the following simplified corporate tax bracket

Question

3. You may use the following simplified corporate tax bracket to answer the following question:

You’re the Chief Operating Officer for Space X, and your current taxable corporate income is \$24,000.

You can undertake a project that will increase your taxable corporate income by \$1,500. The project

costs \$500. Explain your answers to the following questions thoroughly and be sure to address how the

Range Tax

\$0 – \$5,000 10% of the amount over \$0

\$5,000 – \$20,000 \$500 + 20% of the amount over \$5,000

\$20,000 – \$25,000 \$3,500 + 40% of the amount over \$20,000

\$25,000 and over 30% of the amount over \$0

given tax code affects your choices.

a. Do you undertake this project if you are able to finance the project without raising funds?

b. Now suppose that you need to raise the \$500 through either debt or equity financing, and the

interest rate is 10%. Interest paid on loans is deductible, and you can claim a credit for dividend

payments. Do you undertake the project? How do you finance it? Why?

You may use the following simplified corporate tax bracket

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