Asked by Nayely Quintero on Jun 09, 2024
Verified
As income becomes more unequally distributed, the Lorenz curve ________ and ________.
A) moves further down to the right; the shaded area increases
B) moves further up to the left; the shaded area decreases
C) moves further up to the left, rising above the 45 degree line; the shaded area increases
D) moves further down to the right; the shaded area decreases
Lorenz Curve
A graphical representation of the distribution of income or wealth within a society, showing the degree of inequality.
Shaded Area
In graphical analysis, the region enclosed by curves or boundaries, often used to represent quantities such as surplus, deficit, or probability.
- Comprehend the rationale and implications involving the Lorenz curve and Gini coefficient in the context of income distribution assessment.
Verified Answer
HG
Heather GarciaJun 11, 2024
Final Answer :
A
Explanation :
The Lorenz curve illustrates the distribution of income or wealth within a society. As income becomes more unequally distributed, the Lorenz curve moves further down to the right, away from the line of perfect equality (the 45-degree line), and the shaded area between the line of perfect equality and the Lorenz curve, which represents the degree of inequality, increases.
Learning Objectives
- Comprehend the rationale and implications involving the Lorenz curve and Gini coefficient in the context of income distribution assessment.