As the Area Between the Lorenz Curve and Diagonal Gets

question 35

Multiple Choice

As the area between the Lorenz curve and diagonal gets larger, the Gini ratio

• A) rises to reflect greater equality.
• B) rises to reflect greater inequality.
• C) falls to reflect greater inequality.
• D) falls to reflect greater equality.

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Definitions:

Profit-maximizing Monopolist

A monopolist who determines the quantity of output and price levels that result in the highest possible profits, given its unique market power.

Downward-sloping Demand Curves

A graph showing that as the price of a good decreases, the quantity demanded increases, illustrating the inverse relationship between price and demand.

Market Power

The ability of a firm or entity to influence the price or control the availability of products or services in a market.

DeBeers

A global corporation specializing in diamond exploration, mining, retail, and trading, known for its historical monopoly over the diamond market.