The Graph Shown Displays a Lorenz Curve

question 73

Multiple Choice

The graph shown displays a Lorenz curve. Which of the following statements is true? The midpoint of each line demonstrates the area with least inequality.Curve A demonstrates a more equal society than curve B.On both curves, individuals in the 99th percentile of the income distribution earn more than 1 percent of the total income.

• A)I only
• B)II and III only
• C)I and III only
• D)I, II, and III

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Definitions:

Marginal Rate

The rate at which one variable changes as another variable changes by one unit, commonly used in the context of tax rates or marginal rate of substitution in economics.

Transformation

The process of changing the state, form, or structure of something, often seen in contexts ranging from technology to economics.

Production Possibility

Represents various combinations of amounts of two or more goods or services that can be produced within a given time period, with a given amount of resources, and with technology constraints.

Capital

Capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts as well as the physical factors of production.