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 Syldavia.

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 Syldavia.

Quizplus · Accepted Answer

The Gini coefficient is calculated as the area between the line of equality and the Lorenz curve (area Y) divided by the total area under the line of equality (area X + area Y + area Z). Here, Gini = Y / (X + Y + Z) = 240 / (2060 + 240 + 2700) = 240 / 5000 = 0.048, which rounds to 0.05. However, the closest option is 0.46, which suggests a possible error in the problem setup or options.

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