Figure 18-6

Figure 18-6 shows the Lorenz curves for Islandia and Syldavia.
-Refer to Figure 18-6.If area X = 2,060, area Y = 240, and area Z = 2,700, calculate the Gini coefficient for Islandia.
A)0.41
B)0.45
C)0.70
D)0.76

Question

Figure 18-6
  
Figure 18-6 shows the Lorenz curves for Islandia and Syldavia.
-Refer to Figure 18-6.If area X = 2,060, area Y = 240, and area Z = 2,700, calculate the Gini coefficient for Islandia.
A)0.41 
B)0.45 
C)0.70 
D)0.76

Quizplus · Accepted Answer

The Gini coefficient is calculated as the area between the line of equality and the Lorenz curve (area X) divided by the total area under the line of equality (area X + area Y + area Z). Therefore, Gini = X / (X + Y + Z) = 2060 / (2060 + 240 + 2700) = 0.41.

Figure 18-6 Figure 18-6 Shows the Lorenz Curves for Islandia and Syldavia