Question

How does the Lorenz curve rank the population?

• A. According to age
• B. According to geographical location
• C. According to income/consumption levels
• D. According to education level

Answer 1

Answer:

C. According to income/consumption levels

• The Gini-coefficient gives the summary figure for Lorenz curve which first ranks the population according to different levels of consumption/income and then plots the 'cumulative proportion of consumption/income against the cumulative proportion of the population enjoying that level of consumption/income.

• The Gini coefficient takes the theoretical maximum value of 1 when in a population the income level of every individual except one is zero.