Question

a. Describe the relationship that the so-called Lorenz curve traces out. b. Many of the most...

a. Describe the relationship that the so-called Lorenz curve traces out.

b. Many of the most commonly used measurements of the size income distribution are related to the Lorenz curve. Give two examples.

Homework Answers

Answer #1

a) The Lorenz curve is a graphical representation of income inequality. The Lorenz curve plots population percentiles on the horizontal axis and cumulative income on the vertical axis, depicting the relationship between population and income/wealth held by that percentile of the population, thus depicting income inequality.

The Lorenz curve has a 45-degree line of perfect equality passing through the origin.

b) Gini coefficient is a numerical measure of income inequality based on Lorenz curve. It is used to represent distributional inequality. It is the area between the Lorenz curve and the 45-degree line of equality divided by the remaining area below the Lorenz curve.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Lorenz curve is a.a graph of the income distribution that expresses the relationship between the...
The Lorenz curve is a.a graph of the income distribution that expresses the relationship between the cumulative percentage of households and the cumulative percentage of wealth. b.a graph of the income distribution that expresses the relationship between the cumulative percentage of individuals and the cumulative percentage of income. c.a graph of the income distribution that expresses the relationship between the cumulative percentage of households and the cumulative percentage of income. d.a graph of the tax share distribution that expresses the...
Make the assumptions that you consider necessary, explain each of them in detail. The so-called response...
Make the assumptions that you consider necessary, explain each of them in detail. The so-called response functions, which are commonly used to describe the thermodynamic behavior of a simple and homogeneous fluid, are its specific heats, volumetric dilation and isothermal compressibility. a) What is the relationship between them? b) What is the relationship between adiabatic compressibility and the previous functions? c) If instead of a simple and homogeneous fluid, the system of interest is a paramagnetic solid. What will be...
85. A so-called “normal” Treasury yield curve most commonly tends to be: (a) flat; (b) downward...
85. A so-called “normal” Treasury yield curve most commonly tends to be: (a) flat; (b) downward sloping; (c) sloped monotonically positive; (d) shaped like a “W”. 86. Reserves held by banks over and above their required reserves and reserves held as clearing balances: (a) are known as excess reserves; (b) do not earn interest paid by the Fed; (c) can never by lent to borrowers; (d) are counted as part of the money supply as soon as they are received...
80. Prospective investors try to estimate the discounted stream of returns over time in order to...
80. Prospective investors try to estimate the discounted stream of returns over time in order to account for: (a) the time value of money; (b) changing seasonal patterns of spending; (c) variable costs of financing investments; (d) all of the above. 82. One cause of the Great Recession was the packaging of home mortgage loans and selling pieces of those packages to investors. When such packaging takes place: (a) investors earn the prevailing Treasury bill rate; (b) the mortgage loans...
1. Name two ways in which two variables could be related. Select the two most correct...
1. Name two ways in which two variables could be related. Select the two most correct answers. Choose the correct answer below. A) Strong and moderate B) Moderate and negative C) Weak and moderate D) strong and weak 2. Name a graph that can be used to quickly illustrate the relationship between two variables? Choose the correct answer below. A) Histogram B) Regression line C) Scatter plot D) Time series graph. 3. What do we mean by the strength of...
You are considering taking out a loan from the so-called “Tiger B. Shark” finance company. The...
You are considering taking out a loan from the so-called “Tiger B. Shark” finance company. The company’s leaflet states that the loan you plan to take will be settled on a “four-for-five” weekly basis. You ask your friend, who works in the banking industry, for advice on the following issues related to the loan. (a)     What is the weekly interest rate charged on the loan as implied by the phrase “four-for-five weekly basis” in the leaflet?                                                        (b)     What...
4) Suppose you want to find out if there is a relationship between anxiety and sleep...
4) Suppose you want to find out if there is a relationship between anxiety and sleep deprivation. So you go out and find 7 people and measure how much anxiety they are experiencing in their lives and how many hours of sleep they are getting. Let X be the explanatory variable to describe anxiety, you obtain the following values for X in order from subject 1 to subject 7: 1, 2, 4, 4, 5, 8, 7 Let Y be the...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the central bank conducts open market sales following fiscal expansion c. income is stimulated via a tax cut rather than an increase in government spending d. the central bank conducts open market purchases following fiscal expansion e. the LM-curve is horizontal An asset (other than money) is considered to be more liquid if Select one: a. it can be quickly and cheaply transferred into money...
PLEASE FILL IN THE BLANKS WITH THE PROPER TERM! THANKS Key Terms ---------------------------------------------------------------------------------------------------------------------------- Positive relationship ---...
PLEASE FILL IN THE BLANKS WITH THE PROPER TERM! THANKS Key Terms ---------------------------------------------------------------------------------------------------------------------------- Positive relationship --- Occurs in so far as pairs of observations tend to occupy similar relative positions in their respective distribution. Negative relationship --- Occurs in so far as pairs of observations tend to occupy dissimilar relative positions in their respective distribution. Scatterplot --- a graph containing a cluster of dots that represents all pairs of observations. Person correlation coefficient --- A number between –1 and +1...
The aggregate demand curve shows the relationship between the aggregate price level and: A) aggregate productivity....
The aggregate demand curve shows the relationship between the aggregate price level and: A) aggregate productivity. B) the aggregate unemployment rate. C) the aggregate quantity of output demanded by households, businesses, the government, and the rest of the world. D) the aggregate quantity of output demanded by businesses only. 2.When the aggregate price level increases, the purchasing power of many assets falls, causing a decrease in consumer spending. This is known as the _____ effect and is a reason why...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT