Answer:
The correct answer is:
$20,000 (b.)
Explanation:
In order order to calculate the poverty line for Dismal, we will first of all calculate the total number of families in Dismal as follows:
from lowest to high income = 1,000 + 2,000 + 2,000 + 800 + 200 = 6,000
Next, we are told that the poverty rate = 50% = 0.05
Since the Total families = 6000
Therefore, number of poor families = 50% of 6,000 = 0.05 × 6000 = 3,000
Therefore 3,000 families are poor in Dismal
To determine the poverty line, we will count from the lowest earning families upwards until the 3,000th family. The highest income of the 3,000 families counted forms the poverty line. This is done as follows:
1,000 families = $10,000
2,000 families = $10,000 to $20,000
These two groups make up the first 3000 families, and the highest income in the group is $20,000.
Hence the poverty line of Dismal = $20,000
