ECON 162 Lecture Notes - Lecture 6: Lorenz Curve, Gini Coefficient, Arbitrage
Document Summary
Problem set number six: suppose that the economy of loserville has the following distribution of income: first quintile second quintile third quintile fourth quintile fifth quintile. 30% of aggregate income graphically: from the information provided, please derive a lorenz curve for loserville. Show: from the lorenz curve you have drawn, find the gini coefficient, suppose that you wake up one morning and find the following exchange rates: You can profit from international arbitrage because the price differentials allow you to buy a good in a low priced country (using the dollar) and sell that good in a high priced country. No in this example purchasing power parity does hold because the currencies do not have the same purchasing power. Where should copper be: assume that copper currently sells for per pound in the united states, and for 10 per pound in germany. The current exchange rate is 1 = . 50. Yes it is possible to profit from international arbitrage.
