Figure 18-7

Figure 18-7 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 18-7.The second lowest 20 percent of households
A)earn 12 percent of the society's total income.
B)earn 16 percent of the society's total income.
C)earn 28 percent of the society's total income.
D)earn 40 percent of the society's total income.

Question

Figure 18-7
  
Figure 18-7 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 18-7.The second lowest 20 percent of households
A)earn 12 percent of the society's total income. 
B)earn 16 percent of the society's total income. 
C)earn 28 percent of the society's total income. 
D)earn 40 percent of the society's total income.

Quizplus · Accepted Answer

According to the Lorenz curve, the second lowest 20 percent of households earn approximately 16 percent of the society's total income. This can be seen by reading the percentage on the horizontal axis where the curve intersects with the 20 percent vertical line and then following it up to the Lorenz curve.

Figure 18-7 Figure 18-7 Shows the Lorenz Curve for a Hypothetical Country