Consider the Area Between the Line of Perfect Income Equality

question 52

Multiple Choice

Consider the area between the line of perfect income equality and the Lorenz curve. In country A this area is larger than in country B. It follows that

• A)the bottom 20 percent income group receives a lower percentage of total income in country A than in country B.
• B)the bottom 20 percent income group receives a lower percentage of total income in country B than in county A.
• C)the top 20 percent income group receives a higher percentage of total income in country B than in country A.
• D)the top 20 percent income group receives a higher percentage of total income in country A than in country B.
• E)none of the above

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly dividends based on the company's performance.

Profit Maximization

A process or strategy used by businesses to achieve the highest possible profit, considering revenue and costs.

Shirking

The behavior of avoiding work or responsibilities, often seen in employment contexts where workers may not perform their duties optimally.

Worker's Output

The quantity of goods or services produced by an employee within a certain period of time.