What does the Lorenz curve represent?
Last updated Jun 24, 2026
Correct Answer:
Option C —
Income distribution
The Lorenz curve is a graphical representation used in economics to show the degree of inequality in the distribution of wealth or income within a population.Understanding the Lorenz Curve
The Line of Perfect Equality: This is a straight diagonal line at a 45° angle. It represents a theoretical scenario where everyone has the exact same income (e.g., 20% of the population earns 20% of the total income).
The Curve: The actual Lorenz curve bows downward below that diagonal line. The further the curve sags away from the straight line, the greater the level of inequality in that society.
Gini Coefficient: This is a related numerical measure. It is calculated based on the area between the line of perfect equality and the Lorenz curve. A Gini coefficient of 0 represents perfect equality, while 1 (or 100%) represents perfect inequality.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
More Economy questions
From across UPSC, JKPSC, and JKSSB papers — same subject, different years.
Which of the following committee has been constituted by the Reserve Bank of India to look into bank frauds?
With reference to Open Network Digital Commerce (ONDC), consider the following statements:1. It is an initiative of the Ministry of Scien...
Consider the following statements:Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury ...
Consider the following statements regarding 'e-RUPI':1. e-RUPI is a voucher to facilitate cashless payment.
2. In some special circumstan...
As per the economic scholars, __________ was excluded from the definition of factor of production.