The Graph Shown Displays a Society's Lorenz Curve

question 8

Multiple Choice

The graph shown displays a society's Lorenz curve. Which of the following statements is true?

• A)This society would be more unequal if the curve was bowed outward instead of inward.
• B)The top 20 percent of earners hold 10 percent of the total income.
• C)The top 40 percent of earners hold 60 percent of the total income.
• D)Households at the 50th percentile of the income distribution earn the same as households at the 60th percentile of the income distribution.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain is incurred; a critical measure of financial viability for a product or business.

Variable Cost

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as materials and labor.

Fixed Cost

Expenses that do not change in relation to production volume, such as rent, salaries, and insurance premiums.