Exhibit 29-1 Line of Perfect nccene Equality 30 47. Refer to Exhibit 29-1. If th

Question

Exhibit 29-1 Line of Perfect nccene Equality 30 47. Refer to Exhibit 29-1. If the Gini coefficient equals 0, then the Lorenz curve is a. point A b. line OB c. the horizontal axis from 0 to A. d. line AB e. the horizontal axis from 0 to A and the line AB 48. A winner-take-all market a. is one in which the top producer or performer in the market earns significantly more than others in the same market. b. applies to the sports market and the entertainment market, exclusively c, the top producer earns all of the profits in that market. d. a and b e. b and c 49. Smith and Jones are different when it comes to taking risk. Smith will assume much more risk than Jones. It follows that a. Smith will earn more income than Jones. b. Jones will earn more income than Smith. c. Smith has a higher probability than Jones of earning a higher income. d. Smith has a higher probability than Jones of earning a lower income. e. e and d 50. Smith and Jones work at very similar jobs, but Smith earns almost 30 percent more a day than Jones. This is a case of a. gender b. religious c. wage d. ethnic e· There is not enough information to answer the question.

Explanation / Answer

47. The right answer is option B. line OB

Explanation: The Lorenz curve shows the distribution of income in an economy. When the Gini Coefficient equals 0, it means there is perfect equality in the country. The line OB represents perfect equality. So, when the Gini coefficient is zero, OB is the Lorenz curve.

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