Figure 15.5

Figure 15.5 shows the Lorenz curves for Islandia and Syldavia.
-Refer to Figure 15.5.If area X = 2,060, area Y = 240, and area Z= 2,700, calculate the Gini coefficient for Syldavia.

Question

Figure 15.5
  
Figure 15.5 shows the Lorenz curves for Islandia and Syldavia.
-Refer to Figure 15.5.If area X = 2,060, area Y = 240, and area Z= 2,700, calculate the Gini coefficient for Syldavia.

Quizplus · Accepted Answer

To calculate the Gini coefficient, we need to first calculate the area between the line of equality and the Lorenz curve (area A) and the total area under the line of equality (areas A + B + C). Then, the Gini coefficient is calculated as:

Gini coefficient = A / (A + B + C)

In this case, we are given that area X = 2,060, area Y = 240, and area Z = 2,700. Using these values, we can calculate:

A = (2,060 + 240) / 2 - 2,060 = 160 
B = 2,060 
C = 2,700

So,

Gini coefficient = 160 / (160 + 2,060 + 2,700) = 0.46

Therefore, the best choice is C for the Gini coefficient of Syldavia.

Figure 15.5 Figure 15.5 Shows the Lorenz Curves for Islandia and Syldavia