QuestionSoncept Questions
The diagram to the right is a Lorenz curve.
Using the 3-point curved line drawing tool, sketch a Lorenz curve that illustrates a more (but not perfectly) equal distribution of income than the Lorenz curve depicted to the right. Label this curve ' '.
Note: Carefully follow the instructions above and only draw the required object.
Studdy Solution
STEP 1
1. A Lorenz curve represents the distribution of income or wealth within a population.
2. A perfectly equal distribution is represented by the line of equality, a 45-degree line from (0,0) to (100,100).
3. A more equal distribution than a given Lorenz curve will be closer to the line of equality.
STEP 2
1. Understand the current Lorenz curve.
2. Determine the characteristics of a more equal distribution.
3. Sketch the new Lorenz curve.
STEP 3
Understand the current Lorenz curve labeled "LC₁". It starts at the origin (0,0) and curves upwards towards (100,100), showing the current income distribution.
STEP 4
Determine the characteristics of a more equal distribution. A more equal distribution will have a Lorenz curve that is closer to the line of equality than "LC₁".
STEP 5
Sketch the new Lorenz curve, labeled "LC₂", which should be closer to the line of equality than "LC₁". Use the 3-point curved line drawing tool to create a curve that starts at (0,0), is above "LC₁", and ends at (100,100).
The new Lorenz curve "LC₂" should visually represent a more equal distribution of income compared to "LC₁".
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