Figure 17-7 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 17-7. The second highest 20 percent of households
A) earn 24 percent of the society's total income.
B) earn 28 percent of the society's total income.
C) earn 42 percent of the society's total income.
D) earn 72 percent of the society's total income.

Question

Figure 17-7 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 17-7. The second highest 20 percent of households
A) earn 24 percent of the society's total income. 
B) earn 28 percent of the society's total income. 
C) earn 42 percent of the society's total income. 
D) earn 72 percent of the society's total income.

Quizplus · Accepted Answer

The second highest 20 percent of households, often referred to as the fourth quintile in income distribution, earn 24 percent of the society's total income according to the Lorenz curve and income distribution principles. This choice correctly reflects the typical distribution where income is not evenly distributed, with the top quintile usually earning a disproportionately higher percentage of total income.

Figure 17-7 Shows the Lorenz Curve for a Hypothetical Country