What would be the consequence for the Lorenz curve is rich people use their resources more efficiently than poor people?
What will be an ideal response?
The Lorenz curve may understate the actual amount of inequality if richer households are able to use income more efficiently than lower income households or vice versa. Alternatively it may be that measured inequality may be the result of more or less efficient use of household incomes.
You might also like to view...
Price ceilings create shortages, but taxes do not.
Answer the following statement true (T) or false (F)
Buying a used textbook from a fellow student is an example of what type of market?
A. Global B. Local C. Labor D. National
Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. At the original income of $30, if the price of a loaf of bread decreased to $1 and the price of a jar of peanut butter increased to $5, then Dusty could buy a maximum of ________ loaves of bread or a maximum of ________ jars of peanut butter.
A. 30; 6 B. 20; 5 C. 5; 20 D. 6; 30
The 1987 study by Bowen, Leamer and Sveikauskas
A) supported the validity of the Leontief Paradox. B) supported the validity of the Heckscher-Ohlin model. C) used a two-country and two-product framework. D) demonstrated that in fact countries tend to use different technologies. E) proved that the U.S.'s comparative advantage relied on skilled labor.