Exhibit 28-1

-Refer to Exhibit 28-1. If the Gini coefficient is some number greater than 0, but less than 1, then the Lorenz curve could be

Question

Exhibit 28-1
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-Refer to Exhibit 28-1. If the Gini coefficient is some number greater than 0, but less than 1, then the Lorenz curve could be

Quizplus · Accepted Answer

The Gini coefficient measures income inequality within a nation. A Gini coefficient of 0 represents perfect equality (everyone has the same income), while a Gini coefficient of 1 represents perfect inequality (one person has all the income). A Lorenz curve illustrates the distribution of income or wealth within a society. The further the Lorenz curve is from the line of perfect equality (line OB), the greater the inequality. Therefore, if the Gini coefficient is greater than 0 but less than 1, it indicates some level of inequality, which is best represented by a curve (not a straight line) that deviates from the line of perfect equality but does not coincide with the axes or the line of perfect inequality. This is described by option C, the curve connecting point O to point B.

Exhibit 28-1 ​

Exhibit 28-1