The distribution of income for Inequalia is as follows: Number of Families Income
200 less than $5,000
300 between $5,000 and $10,000
500 between $10,000 and $15,000
700 between $15,000 and $20,000
300 over $20,000
If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

Question

The distribution of income for Inequalia is as follows: Number of Families Income
  200 less than $5,000
300 between $5,000 and $10,000
500 between $10,000 and $15,000
700 between $15,000 and $20,000
300 over $20,000
 If the poverty rate in Inequalia is 25 percent, what is the poverty line in Inequalia?

Quizplus · Accepted Answer

To find the poverty line, we need to find the income level at which 25% of families or more have an income below that level. 
- For incomes below $5,000, there are 200 families, which is less than 25% of the total number of families.
- For incomes below $10,000, there are a total of 200 + 300 = 500 families, which is still less than 25% of the total number of families. 
- For incomes below $15,000, there are a total of 200 + 300 + 500 = 1000 families, which is more than 25% of the total number of families. Therefore, the poverty line must be below $15,000.
- For incomes below $20,000, there are a total of 200 + 300 + 500 + 700 = 1700 families, which is more than 25% of the total number of families. Therefore, the poverty line must be between $15,000 and $20,000.
- Since 25% of families are below the income level of $10,000, and there are 500 families between $5,000 and $10,000, it is safe to assume that more than 25% of families are below $10,000. Therefore, the poverty line is likely above $5,000. 
- Thus, the only option left is B, $10,000, which is the income level at which 25% to 30.88% of families have an income below that level.

The Distribution of Income for Inequalia Is as Follows: Number