What are the major criticisms of the Lorenz curve?
What will be an ideal response?
The Lorenz curve typically is presented in terms of the distribution of money income and ignores income in kind. It also does not account for differences in family sizes, the number of income earners in the family, or the ages of the families. The Lorenz curve also reflects income before taxes rather than disposable income, and fails to measure income from the underground economy.
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Credit markets are
A) bad, as they cause people to accumulate debt. B) not important for the financial crisis. C) important, but given too little attention in the past by macroeconomists. D) markets that work perfectly.
If a price ceiling is set above the current market clearing price, then
A) a surplus must immediately occur. B) a shortage must immediately occur. C) there will be incentives for black markets to develop. D) quantity demanded will remain equal to quantity supplied at the current market clearing price.