An approximate Lorenz curve shows
A)the maximum and minimum wage gaps.
B)the relationship between income and tax revenue.
C)the share of income received by age group.
D)the relationship between income and earnings potential.
E)the cumulative share of income earned by quintiles of households.

Question

Quizplus · Accepted Answer

An approximate Lorenz curve shows the cumulative share of income earned by quintiles of households, which is represented by the curve's shape. The closer the curve is to the diagonal, the more equal the distribution of income is, while the further away from the diagonal, the more unequal the distribution is. Therefore, choice E is the best answer.

An Approximate Lorenz Curve Shows