Assignment:
Consider an economy with 7 households. The three poorest households in this economy have income (and consumption) per day of 0.2$, 0.5$ and 0.5$, respectively. The other four households have income above the poverty line. The poverty line is 1$ per day. What is the poverty gap of this economy?
a) 3/7
b) 0.5
c) 0.25
d) 0.68
e) None of the above.