Exhibit 28-2

-Refer to Exhibit 28-2. This graph depicts the Lorenz curve for two countries, country 1 (Lorenz curve 1) and country 2 (Lorenz curve 2). Although the Gini coefficient is __________ in country 1 than in country 2, the bottom quintile in ____________ receives a larger share of income compared to the bottom quintile in _______________.

Question

Exhibit 28-2
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-Refer to Exhibit 28-2. This graph depicts the Lorenz curve for two countries, country 1 (Lorenz curve 1) and country 2 (Lorenz curve 2). Although the Gini coefficient is __________ in country 1 than in country 2, the bottom quintile in ____________ receives a larger share of income compared to the bottom quintile in _______________.

Quizplus · Accepted Answer

The Lorenz curve is a graphical representation of income distribution within a country, where a curve closer to the line of perfect equality (a 45-degree line from the origin) indicates a more equal distribution of income. A higher Gini coefficient indicates greater inequality. If Lorenz curve 1 is closer to the line of perfect equality than Lorenz curve 2, it means income is more equally distributed in country 1 than in country 2, hence a lower Gini coefficient for country 1. However, without seeing the actual curves, the specific allocation to the bottom quintile cannot be determined from the information given. The explanation provided is based on the general understanding of how Lorenz curves and Gini coefficients work to represent income distribution and inequality.

Exhibit 28-2 ​

Exhibit 28-2