In a Lorenz curve diagram,the size of the area between the Lorenz curve and the diagonal line represents
A)the percentage of income received by the bottom 20% of families.
B)the percentage of income received by the top 5% of families.
C)the dollar incomes of the bottom 40% of families.
D)complete income equality.
E)the degree of inequality in the distribution of income.

Question

Quizplus · Accepted Answer

The size of the area between the Lorenz curve and the diagonal line represents the degree of inequality in the distribution of income. This is because the Lorenz curve shows the percentage of total income that is received by each percentile of the population, and if the curve is further from the diagonal line, it indicates a greater concentration of income in a smaller proportion of the population, leading to greater inequality. Therefore, option E is the best choice.

In a Lorenz Curve Diagram,the Size of the Area Between