Assume the government gives someone that earns no income the following benefits: a. $400 per month in welfare with a benefit reduction rate of 50%. b. $200 worth of food stamps with a 60% benefit reduction rate. c. Housing vouchers worth $400 with a 50% benefit reduciton rate. This means $1,000 of benefits in total. If the person then earns $100 in wage income his total income (wages and benefits) for the month would be: A. $940 B. $1040 C. $1140 D. $1000 Correcting the 2002 US Distribution of Income figures for a) population, and b) transfers results in: A. The share of income earned by the top quintile falling and the share of income earned by the bottom quintile rising B. The share of income earned by the top quintile rising and the share of income earned by the bottom quintile falling C. The share of income earned by the top quintile rising and the share of income earned by the bottom quintile rising D. The share of income earned by the top quintile falling and the share of income earned by the bottom quintile falling If the gini coefficient falls from .40 to .20 A. per capita income has fallen but we do not know by how much B. the economy has doubled per capita income C. per capita income has been cut in half D. per capita income has risen but we do not know by how much E. the economy may or may not have had economic growth Solution 1.Answer:A (Total Income=1000+100-0.5*100-0.6*100-0.5*100=1100-160=940) 2.Answer: B (The share of income earned by the top quintile rising and the share of income earned by the bottom quintile falling) 3.E. the economy may or may not have had economic growth . Gini co-efficient only shows how the income is distributed among the population. .