Consider the area between the line of perfect income equality and the Lorenz curve. In country A this area is larger than in country B. It follows that

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Quizplus · Accepted Answer

The area between the line of perfect income equality and the Lorenz curve represents the degree of income inequality in a country. A larger area indicates greater inequality. Therefore, the statement "In country A this area is larger than in country B" implies that income inequality is greater in country A than in country B. However, this does not provide enough information to determine specific relative income comparisons between the two countries, such as which income group receives a higher or lower percentage of total income.

Consider the Area Between the Line of Perfect Income Equality