Country a Has a More Equal Distribution of Income Than

question 307

Multiple Choice

Country A has a more equal distribution of income than country B if

• A) country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve.
• B) country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve.
• C) country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve.
• D) None of the above because it is impossible to compare income inequalities across countries.

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Definitions:

Denominator Level

The level of activity used to compute the fixed manufacturing overhead rate in absorption costing, affecting inventory and cost of goods sold.

Budget Variance

The difference between budgeted amounts and actual amounts spent or received.

Volume Variance

The difference between the expected volume of production or sales and the actual volume, affecting budgeting and costing.

Overhead Variances

The difference between the actual overhead costs incurred and the standard overhead costs expected for the level of activity.