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AP Microeconomics Pol 5 A Define Measures of Economic Inequality in Income and Wealth Questions

Interpret Lorenz curves, cumulative income shares, and Gini values to compare distributions, then evaluate how progressive taxes and transfers change measured inequality.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • interpret a Lorenz curve as cumulative household shares plotted against cumulative income shares
  • compare inequality by judging how far each Lorenz curve lies from the line of perfect equality
  • interpret a higher Gini coefficient as greater inequality and recognize the zero-to-one endpoints
  • use Lorenz curves or quintile tables to judge how progressive taxes and transfers redistribute income

AP Microeconomics Pol 5 A Define Measures of Economic Inequality in Income and Wealth Questions question 1

[Maximum number: 1]

On the Lorenz curve, all of the following are true except

A

line A shows more income inequality than line B.

B

line A shows perfect income equality.

C

line B shows less income inequality than line C.

D

line C shows greater income inequality than line A .

E

on line A, 50\% of families earn 50\% of the total income.

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