The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
FIGURE 13- 2
-The diagonal line on a Lorenz curve diagram represents
A)the percentage of income received by the top 50% of families.
B)the degree of inequality in the distribution of income.
C)the dollar incomes of the bottom 50% of families.
D)the percentage of income received by the bottom 50% of families.
E)where the Lorenz curve would be if there were complete income equality.

Question

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
  FIGURE 13- 2
-The diagonal line on a Lorenz curve diagram represents
A)the percentage of income received by the top 50% of families. 
B)the degree of inequality in the distribution of income. 
C)the dollar incomes of the bottom 50% of families. 
D)the percentage of income received by the bottom 50% of families. 
E)where the Lorenz curve would be if there were complete income equality.

Quizplus · Accepted Answer

The diagonal line on a Lorenz curve represents perfect income equality, where each percentage of households receives the same percentage of total income.

The Diagram Below Shows the MRP Curve for a Firm