Recall the power law: Y=kX-a or equivalently logY=logk-alog.X Suppose that using the data, you plug in households' incomes into X, and the percentile of the households when ranked by incomes into Y. You find that a=1. Which of the following are true? Question 3 Select one or more: a. In the longer-run, the slope, a, is likely to become higher than 1. b. Incomes should follow a log-normal distribution, so the distribution of log(incomes) should have a bell-shape. c. The slope, a=1, indicates that the U.K. is in a long-run steady state. d. Incomes explode proportionately at the top with rank, so logging them by rank makes it easier to understand the income differences between very rich people. e. A smaller value of a means less income concentration.

Recall the power law: Y=kX-a or equivalently logY=logk-alog.X Suppose that using the data, you plug in households' incomes into X, and the percentile of the households when ranked by incomes into Y. You find that a=1. Which of the following are true? Question 3 Select one or more: a. In the longer-run, the slope, a, is likely to become higher than 1. b. Incomes should follow a log-normal distribution, so the distribution of log(incomes) should have a bell-shape. c. The slope, a=1, indicates that the U.K. is in a long-run steady state. d. Incomes explode proportionately at the top with rank, so logging them by rank makes it easier to understand the income differences between very rich people. e. A smaller value of a means less income concentration.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter1: Introducing The Economic Way Of Thinking

Section1.A: Applying Graphs To Economics

Problem 1SQP

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