Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 78, Problem 6MCQ
To determine
The Lorenz curve when every person received exactly the same income in an economy.
Expert Solution & Answer
Answer to Problem 6MCQ
From the available options, the correct option is straight.
Explanation of Solution
When everyone in an economy had the same share of the money, the Lorenz curve would be a straight line at a 45-degree angle since there would be an equal distribution of income throughout the nation. Additionally, the Lorenz curve would be a straight line at a 45-degree angle when the income distribution is more evenly distributed.
Thus, neither a downhill nor an upward slope would be provided by this curve. And on the graph, it wouldn't be either vertical or horizontal.
The right answer in this case is option d (straight).
Economics Concept Introduction
Introduction: The Lorenz curve shows the graphical representation of inequality in income and inequality in wealth which was developed by Max Lorenz.
Chapter 78 Solutions
Krugman's Economics For The Ap® Course
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