Question
If the Lorenz Curve were used to graph the distribution of income in an economy where all households earn the exact same income, the graph would show a _____.
straight line and sloped diagonally upward
curved line and sloped diagonally downward
curved line and sloped diagonally upward
straight line and sloped diagonally downward
straight line and sloped diagonally upward
curved line and sloped diagonally downward
curved line and sloped diagonally upward
straight line and sloped diagonally downward
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GPT-4o mini
If the Lorenz Curve were used to graph the distribution of income in an economy where all households earn the exact same income, the graph would show a **straight line and sloped diagonally upward**.
This is because, in a situation of perfect income equality, the cumulative share of income received by the bottom x% of households would equal the cumulative share of households. Hence, the Lorenz Curve would coincide with the line of perfect equality, which is a straight diagonal line from the origin to the top right corner of the graph.
This is because, in a situation of perfect income equality, the cumulative share of income received by the bottom x% of households would equal the cumulative share of households. Hence, the Lorenz Curve would coincide with the line of perfect equality, which is a straight diagonal line from the origin to the top right corner of the graph.
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