Problem
Consider a hypothetical island with only ten people. Eight have income of $10,000, one has income of $50,000, and one has income of $100,000.
a. Draw the Lorenz curve for this income distribution. What is the approximate value of the Gini coincident?
b. Suppose that a wealthy newcomer arrives on this island with an income of $500,000. How does it change the Lorenz curve? What is the impact on the Gini coincident?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.