In both countries A and B two groups of income recipients are identified. Within each group income is evenly distributed, but the upper income group receives a disproportionate share of national income:

Country A: the lower 40% of income recipients receive 30% of total income and the upper 60% of income recipients receive 70% of total income;

Country B: the lower 50% of income recipients receive 40% of total income and the upper 50% of income recipients receive 60% of total income.

i Draw a Lorenz Curve for each country (remember to label the axes);

ii Calculate Gini Coefficients for countries A and B;

iii Explain briefly what the Gini Coefficients tell us about the comparison of the degree of inequality of income distribution in the two countries.