The Graph Which Represents the Distribution of Income in an Economy

question 97

Multiple Choice

The graph which represents the distribution of income in an economy is called the

• A) Laffer curve.
• B) Lorenz curve.
• C) distribution curve.
• D) aggregate demand curve.

---

Definitions:

Externality Problem

A situation where the actions of individuals or firms result in costs or benefits to others that are not reflected in the market prices.

Subsidy

A financial contribution provided by government to reduce the cost of producing goods or services and support businesses or consumers.

External Costs

Costs of an economic activity that are not borne by the parties directly involved in the transaction but by other individuals or society at large.

Supply Curve

A graph that represents the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.