If the Area Between the Diagonal Line of Absolute Equality

question 81

Multiple Choice

If the area between the diagonal line of absolute equality and the Lorenz curve is greater for the United States than for Japan,we can conclude that the

• A)Distribution of income in Japan is closer to being equal than in the United States.
• B)Distribution of income in Japan is as equal as in the United States.
• C)Distribution of income in Japan is less equal than in the United States.

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Definitions:

Price Elasticity

An assessment of the degree to which the demand or supply for a product varies following a price alteration.

Demand Curve

A graph showing the relationship between the price of a good and the amount of it that consumers are willing and able to purchase at various prices.

High-price Ranges

The upper levels of price points at which products or services are sold, often implying premium quality or exclusivity.

Perfectly Inelastic

Describes a situation in demand or supply where the quantity demanded or supplied does not change in response to a price change.