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The Benchmark of Perfect Equality
On a graph used to visualize income distribution, a 45-degree diagonal line is always included as a reference. Explain what this line represents and why it serves as the benchmark for a perfectly equal distribution.
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A graph plots the cumulative percentage of a population against the cumulative percentage of total income they possess. The graph includes a 45-degree diagonal line, which represents a perfectly equal distribution. Two different societies are represented by two separate curves on this graph. Curve A is positioned closer to the 45-degree line than Curve B. What can be concluded by comparing these two curves?
Interpreting Income Distribution Data
The Benchmark of Perfect Equality
On a graph representing income distribution, if a society's curve shows that the bottom 50% of the population holds exactly 50% of the total income, this single data point is sufficient to conclude that the society has perfect income equality.