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Chapter 15: Q.24 (page 378)

If a country had perfect income equality what

would the Lorenz curve look like?

Short Answer

Expert verified

it would be line sloping up at 45 degrees.

Step by step solution

01

Step 1. Definition 

it's a Graphical way of studying dispersion, Lorenz curve, was first used to measure the inequalities of income in society, the greater distance of the curve from the line of equality distribution more is the inequality in its series

02

Step 2. Graph 

03

Step 3. Explanation

if a country has perfect income equality that means

total income distribution= total income

but Lorenz curve measures inequalities of income, so the 45-degree line displays the perfect equality of income distribution

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Most popular questions from this chapter

What goods and services would you include in an

estimate of the basic necessities for a family of four?

What is measured on the two axes of a Lorenz

curve?

What are the main reasons economists give for the

increase in inequality of incomes?

A group of 10 people have the following annual incomes: \(24,000, \)18,000, \(50,000, \)100,000, \(12,000,

\)36,000, \(80,000, \)10,000, \(24,000, \)16,000. Calculate the share of total income that each quintile receives from this

income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?

If a family of three earned $20,000, would they

be able to make ends meet given the official poverty threshold?
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