What would a curve representing income inequality look like in a society with less inequality than the United States?

What would a curve representing income inequality look like in a society with less inequality than the United States?

• A. More steep
• B. Less steep
• C. Flat
• D. Inverted U

Answer: (B)

Incomes are shown with the Lorenz curve, where the line of equality represents perfect distribution. The further the curve bows away from that diagonal, the greater the inequality. If a society has less inequality than the United States, its curve would bow less and sit closer to the line of equality. Describing that geometry simply, it would appear less steep in its departure from the diagonal, meaning it’s closer to equal distribution overall. A much flatter curve would imply almost perfect equality, which isn’t what’s being implied here; an inverted U describes a different pattern over development, not a static comparison of overall inequality. So the curve would be less steep, closer to the line of equality.

Incomes are shown with the Lorenz curve, where the line of equality represents perfect distribution. The further the curve bows away from that diagonal, the greater the inequality. If a society has less inequality than the United States, its curve would bow less and sit closer to the line of equality. Describing that geometry simply, it would appear less steep in its departure from the diagonal, meaning it’s closer to equal distribution overall. A much flatter curve would imply almost perfect equality, which isn’t what’s being implied here; an inverted U describes a different pattern over development, not a static comparison of overall inequality. So the curve would be less steep, closer to the line of equality.