-The Above Figure Shows Two Lorenz Curves

question 152

Multiple Choice

-The above figure shows two Lorenz curves. Lorenz curve A shows the distribution of income and Lorenz curve B shows the distribution of wealth. Which statement below is CORRECT?

• A) The Lorenz curve for wealth shows that wealth is distributed less equally because wealth does not include human capital.
• B) The Lorenz curve for income shows that income is distributed less equally because income does not include income from stocks and bonds.
• C) The Lorenz curves show wealth is greater than income.
• D) The Lorenz curves show income is greater than wealth.

---

Definitions:

Market

A system or arena where buyers and sellers interact to trade goods, services, or resources.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Tax

A compulsory financial charge or other levy imposed on an individual or a legal entity by a governmental organization.

Market

A venue for the exchange of goods, services, or information between buyers and sellers, which may be physical or virtual.