(a)[12]
Explain why economists make use of a Lorenz curve and a Gini co-efficient and comment on the likely government policy implications if a country’s Gini co-efficient rose from 0.34 to 0.68.
(b)[13]
With the aid of a diagram analyse what is likely to happen to a worker’s transfer earnings and economic rent if a perfectly competitive labour market is replaced by a monopsony.