Initial Lorenz Curve in Figure 2.25
The Lorenz curve for the initial equilibrium in Figure 2.25 is constructed from straight-line segments connecting the points (0,0), (10,0), (90,76), and (100,100). This configuration illustrates an economy where the poorest 10% of the population are unemployed, the next 80% are employed, and the top 10% are owners. The cumulative income for the bottom 90% of the population (unemployed plus employed) is 76% of the total.
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Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
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An economy's income distribution is represented by a Lorenz curve that passes through the points (0,0), (10,0), (90,76), and (100,100), where the first coordinate is the cumulative percentage of the population and the second is the cumulative percentage of total income. Based on this data, which statement correctly compares the income share of the middle 80% of the population (from the 10th to the 90th percentile) to the income share of the wealthiest 10% of the population?
Evaluating a Policy Claim with Lorenz Curve Data
Consider an economy where the income distribution is represented by a Lorenz curve passing through the points (0,0), (10,0), (90,76), and (100,100), where coordinates represent (cumulative % of population, cumulative % of income). In this economy, the income share of the wealthiest 10% is more than one-third of the income share of the population between the 10th and 90th percentiles.
Calculating Income Share from Lorenz Curve Data