The Gini Coefficient Measures

question 16

Multiple Choice

The Gini coefficient measures:

• A)the area under the Lorenz curve
• B)the area above the Lorenz curve
• C)twice the area between the Lorenz curve and the line of equality
• D)half the area between the Lorenz curve and the line of equality

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Definitions:

Fixed Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Direct Labor

Refers to the wages or salaries paid to employees directly involved in the production of goods or services.

Direct Materials

Raw materials that can be directly linked to the production of a specific product.

Fixed Overhead

Regular, ongoing expenses that are not affected by changes in production level or output, such as rent and insurance.