The Closer the Lorenz Curve Is to the Line of Equality

question 111

Multiple Choice

The closer the Lorenz curve is to the line of equality,

• A)the more equal is the distribution.
• B)the less equal is the distribution.
• C)the more unfair is the income distribution.
• D)the richer are the highest 5 percent of households.
• E)the poorer are the highest 5 percent of households.

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Definitions:

Marginal Social Benefit

The incremental advantage to the community from the consumption or production of an additional unit of a product or service.

Pollution

is the introduction of contaminants into the natural environment that cause adverse changes, affecting air, water, and land quality detrimentally.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit.

Externalities

Economic side effects or consequences of industrial or commercial activity that affect other parties without being reflected in the costs of the goods or services involved.