FIGURE 13- 1
-Refer to Figure 13- 1. On the Lorenz curve shown in the diagram,
A) the richest 20 percent of families earn over 60 percent of total income.
B) the richest 20 percent of families earn almost 40 percent of total income.
C) the functional distribution of income is shown.
D) the poorest 20 percent of families earn almost 90 percent of total income.
E) perfect equality of income distribution occurs.

Question

FIGURE 13- 1
-Refer to Figure 13- 1. On the Lorenz curve shown in the diagram,
A) the richest 20 percent of families earn over 60 percent of total income. 
B) the richest 20 percent of families earn almost 40 percent of total income. 
C) the functional distribution of income is shown. 
D) the poorest 20 percent of families earn almost 90 percent of total income. 
E) perfect equality of income distribution occurs.

Quizplus · Accepted Answer

The Lorenz curve in the diagram shows that the richest 20 percent of families earn almost 40 percent of total income. This can be determined by looking at the point where the curve intersects with the 20 percent mark on the horizontal axis, and then following that point up to the curve to see the corresponding percentage of total income earned.

FIGURE 13- 1 -Refer to Figure 13- 1. on the Lorenz Curve Shown