In an economy where the poorest quintile of the population receives 5 percent of the income, the Lorenz curve:

Question

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The Lorenz curve plots the cumulative percentage of income received against the cumulative percentage of the population, from the lowest income earners to the highest. In an economy where the poorest quintile of the population receives only 5 percent of the income, it means that the income distribution is very unequal. Thus, the Lorenz curve will lie below the diagonal of the box, indicating that a small proportion of the population holds a large proportion of the income.

In an Economy Where the Poorest Quintile of the Population