Figure 16.5 Figure 16.5 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 16.5.The middle 40 per cent of households

Question

Figure 16.5  Figure 16.5 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 16.5.The middle 40 per cent of households

Quizplus · Accepted Answer

The Lorenz curve shows the cumulative percentage of income earned by households in increasing order of their share of total income. The point where the Lorenz curve intersects the diagonal line (representing perfect equality) gives us an idea of the distribution of income. In this case, the middle 40 per cent of households earn approximately 40 per cent of the society's total income, as read off from the Lorenz curve. Therefore, the correct choice is B.

Figure 165 Figure 16