In the below graph, the white area in the upper left hand side represents 50% of the total area of the rectangle, the shaded area represents 27% of the area of the rectangle, and the white area in the lower right hand side represents 23% of the area in the rectangle. Based on this information, what is the Gini coefficient? Show your work. This diagram illustrates the Lorenz Curve, a tool used to represent income distribution within a population. The x-axis represents the "Share of Households," while the y-axis denotes the "Share of Income."### Key Components:1. **Perfect Equality Lorenz Curve** (Line AB): - This straight diagonal line represents perfect income equality, meaning every household earns the same share of total income. 2. **Actual Lorenz Curve** (Line AC): - This curved line shows the actual distribution of income. The greater the distance from the perfect equality line, the greater the level of income inequality.3. **Areas Between the Curves**: - The area between line AB (perfect equality) and the actual Lorenz curve represents the degree of income inequality. - The labeled sections, "50%", "27%", and "23%", correspond to different segments quantifying the distribution of income.The further the Actual Lorenz Curve is from the Perfect Equality Lorenz Curve, the greater the inequality in income distribution. This tool helps in visualizing and analyzing economic inequality within a society.

Income inequality refers to the uneven distribution of income in a population or in an economy. Income inequality has been a major problem for most countries over the period of time. Gini coefficient is a measure of income inequality. The Gini coefficient takes values between 0 and 1. A value of 1 indicates perfect inequality and a value of zero indicates no inequality.The Gini coefficient is calculated as the ratio of the area between the Lorenz curve and the perfect equality line and the total area under the perfect equality line. The area between the Lorenz curve and the perfect equality line is 27 percent. The total area under the perfect equality line is 50 percent. Therefore the Gini coefficient is calculated as, Gini coefficient=Area between Lorenz curve and perfect equality lineArea under perfect equaltity line=27%50%=0.54 Therefore the Gini coefficient is 0.54.