Suppose that in a certain society $10,000 is the official cut-off of income for the poor. This means that any person making less than $10,000 is considered poor. Suppose further that there are three people in this society: Randy, Marlon, and Tito, with incomes of $9,900, $9,900, and $5,000, respectively.
A) How many people are in poverty?
B) How much income would it take, on average, to lift every poor person out of poverty?
C) What if some policy caused $200 to be taken from Tito and given to Randy. How many
people are in poverty now? How much income would it take, on average, to lift every poor
person out of poverty?
A) Three people are in poverty.
B) It would take $1,733.33, on average, to lift them out.
C) Two people are in poverty but it would now take $2,650.00, on average, to lift them out.
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