Exhibit 17-1 The Lorenz Curve Refer to Exhibit 17-1.The 45 degree line in the figure represents:

Question

Exhibit 17-1 The Lorenz Curve  Refer to Exhibit 17-1.The 45 degree line in the figure represents:

Quizplus · Accepted Answer

The 45 degree line in the Lorenz Curve represents the line of perfect equality. It shows the distribution of income if every household had an equal share of total income. Therefore, Option B is the correct choice. Option A is incorrect because the line of perfect inequality would be a straight line from the origin to the upper-right corner of the graph. Option C is incorrect because the non-wage income of households is not represented by the Lorenz Curve. Option D is incorrect because the actual distribution of income is shown by the Lorenz Curve, not the 45 degree line.

Exhibit 17-1 the Lorenz Curve Refer to Exhibit 17-1