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The Following Diagram Shows Three Lorenz Curves for Countries A

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Essay

The following diagram shows three Lorenz curves for countries A, B, and C. The area between the Lorenz curve and the diagonal is 1,000 for Country A, 2,000 for Country B, and 2,500 for Country C. (The entire area under the diagonal is 5,000 because the area of the triangle is ½ × (base × height) = ½ × (100 × 100) = 5,000.)
(1) Calculate the Gini coefficient for each country.
(2) Based on the Gini coefficient, which country has the most equal distribution of income? Which country has the least? The following diagram shows three Lorenz curves for countries A, B, and C. The area between the Lorenz curve and the diagonal is 1,000 for Country A, 2,000 for Country B, and 2,500 for Country C. (The entire area under the diagonal is 5,000 because the area of the triangle is ½ × (base × height) = ½ × (100 × 100) = 5,000.) (1) Calculate the Gini coefficient for each country. (2) Based on the Gini coefficient, which country has the most equal distribution of income? Which country has the least?


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