A Lorenz curve graphic shows What the income distribution should be for maximum economic benefit what...

A Lorenz curve graphic shows

What the income distribution should be for maximum economic benefit

what perfect inequality of the income distribution looks like compared to perfect equality of the income distribution.

what equal and unequal distribution of income will look like in the future.

what perfect equality of the income distribution looks like compared to the actual income distribution.

Expert Solution

Answer

Option D) is correct.

A Lorenz curve graphic shows what perfect equality of the income distribution looks like compared to the actual income distribution.

Reason:

In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution.

It is often used to represent income distribution, where it shows for the bottom x% of households, what percentage (y%) of the total income they have. The percentage of households is plotted on the x-axis, the percentage of income on the y-axis. Many economists consider it to be a measure of social inequality.

A perfectly equal income distribution would be one in which every person has the same income. In this case, the bottom N% of society would always have N% of the income. This can be depicted by the straight line y = x; called the "line of perfect equality."

Rahul Sunny answered 2 years ago

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