Income Distribution Homework Answers

Income distribution refers to the study of equality or inequality in distributing income among the larger sections of society. In every society, some earn more while some earn less. This disparity is the basis of income distribution studies. Study of this topic is necessary for economics students as it helps them to understand the functioning of an economy.
Causes of inequality in incomes
A student of economics has to be well versed in all the factors leading to income inequality so that he can do his income distribution homework answers correctly. Analysis shows that this inequality is caused by several factors such as:
Economic and tax policies: Tax reforms or economic policies of governments may sometimes lead to rich becoming richer and poor becoming poorer.
Technology and automation: This has been a big concern among lower sections of society. More and more industries are moving to automation as part of cost cutting and improving efficiency. While this leads to surplus earnings for industries, it also has the adverse effect that many workers are losing their jobs.
Globalisation: Impact of globalisation and liberalisation on global markets is a topic which needs close study. Students need to understand these topics clearly as it will be helpful in solving income distribution homework answers. Globalisation has caused business to move to cheaper international markets. This led to lots of disruption in domestic labour market.
Salary disparity: The growing disparity in pay structure of higher management staff and lower strata of workers leads to unequal income distribution. The salary of CEOs shows rapid rise over the years while those of lower category of workers rise only marginally.
Gender pay gap: There is a large disproportion in earnings of men and women workers in the same sector. This also affects equality of income distribution. Women are generally paid less when compared to men.
Ways to measure income distribution
There are several techniques adopted by economists to measure earnings equalities. Specialised measures like Gini coefficient and Lorenz curve help in ascertaining this precisely. Stated in simple terms, income distribution can be calculated by finding out how much income is earned by various sections of the society. For this, the society will be divided into several sections. Data for each section is obtained from separate sources.
For example, if data from tax files are resorted to, it will reflect earnings of only the middle and upper sections. Most low earnings categories do not have tax records. So for this data, other sources are to be verified. Data thus procured is analysed to see what percentage of total income is earned by each segment.
Important topics to master in income distribution homework answers
Income distribution studies have lots of associated theory to learn. Familiarising with these terms will make learning better.
Gross Domestic Product or GDP: Income inequality occurs when the GDP of a nation is unequally distributed among the public. GDP is the monetary value of total of all goods and services produced in a country during a period. It measures the economic performance of a whole country.  How the GDP is distributed per capita is the essence of earnings distribution studies.
Lorenz curve: This is a graphical representation of distribution of income. This curve represents the percentage of total income acquired by a specified group in the lower income category. This typically depicts the disparity in the lower levels.
Gini coefficient: This is a measure of statistical dispersion used to represent income distribution of a particular nation. The coefficient ranges from zero to one. A coefficient of zero denotes perfect equality in income distribution while one denotes perfect inequality. No nation will have perfect zero or one, and the figure always varies within the given ranges.
Why students stumble
Income equality topics are not favourites of most students. Many of them look for excuses to escape from income distribution homework answers. They have endless list of complaints about this.

  • Graphs and symbols:

It is true that techniques for analysing earnings disparity use graphs and symbols to a great extent. Learning these equations and symbols is a difficult task for an average student. The graphical representation is also not easy unless concepts are clear.

  • Tough terminology:

Terms and theories of income distribution are highly demanding. Learning all aspects of topics like Lorenz curve is not a cakewalk for all.

  • Statistical tools:

Learning income distribution requires good knowledge of statistical tools like variance analysis. Students who detest statistics find this also nerve wrecking.

  • Improper theory studies:

This concept is one which requires students to be good in theory as well as practical aspects. Some students just ignore the theory part. They find practical problems going nowhere without proper understanding.
Ways to excel in income equality studies
Income disparity studies can be managed and mastered with dedication and proper guidance.

  • Mind the concepts:

Never ignore the text books, however lengthy they are. Most students have a tendency to skip pages of theory in difficult topics. They mark some points as important and go through only that. But the most important point to remember is that not a single word in your text book is given uselessly. You cannot afford to skip lessons if you want decent scores.

  • Practise lots:

Learning to find income disparity using a Lorenz curve or Gini coefficient requires lots of practice. Master income distribution homework answers by finding different sources of practical problems and solving them. There are websites which offer practice tests for students. Get registered to a good site and start solving.

  • Get into study groups:

Groups are not just for hanging out. Get a group of friends who are interested in studying together. The advantage of learning together is that you get to express and speak out your doubts and theories. Studies have proven that group study improves memory.

  • Get help from websites:

Very often, students struggle to get help for income distribution homework answers. Technology can be of help if used wisely. There are many sites that offer homework solutions in a time bound manner so that students need not worry about tough deadlines for submissions. This source has been found to be highly dependable. Only precaution to be taken is to guard against the tendency to be over dependent.

  • Never miss classrooms:

Learning from your teacher’s mouth is as important as self-study or websites. Be regular in attending classes. If you are not regular with your classes, you might miss important topics in income theories and struggle later on.
Mastery over income disparity and related topics is not a difficult task, if studied with devotion and dedication. Give your best and success will follow.


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