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This graph depicts the income inequality in a country using the Lorenz curve. The horizontal x-axis represents the percentage of families, and the vertical y-axis
This graph depicts the income inequality in a country using the Lorenz curve. The horizontal x-axis represents the percentage of families, and the vertical y-axis depicts the percentage of income. Both axes are divided into increments of 20, ending at 100. A vertical line at x = 100 means that one person earned 100% of the income in the country. However, this is a hypothetical scenario. The perfect income equality is depicted by a line that cuts the graph at 45 degrees. The reality of the population's income depicted on the graph is listed next. Approximately 20% of the nation's families earn 1% of the total income. 40% of the nation's families earn less than 20% of the total income. 60% of the nation's families earn less than 40% of the total income. 80% of the nation's families earn around 60% of the total income. Joining these data points on the graph shows us the actual income inequality in a country. Given the above graph of a country's Lorenz Curve, how would we describe this country's income distribution? a.) Perfect income equality b.) Negative income inequality c.) Very small amount of income inequality d.) Significant income inequality
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