Question

The Lorenz Function is a way to measure wealth inequity in a given population (for example, residents of the United States). Ifo PS 1, then L(p)-the percent of total wealth owned by the poorest p percent of the population. In other words, if L(0.2) = 0.1, this says that the poorest 20% of people own 10% of the wealth. 1. In real-world terms, explain: (a) What would it mean if L(p) were close to p for some value of p? (b) What would it mean if L(p) were close to 0 for some value of p? (c) The Lorenz function always satisfies L(0) = 0 and L(1) = 1, Why?

Answer 1

し(p) --ment of wealth owned ba poorest 22t 3on-of-porest-pop.-w,w.own İntqwality..s If L(p) is clace to P 1+ will an L(0):0 0%--of-poDreck. populat cau (0 MO loon-of-tne wealth -which is also true .-