Economics 1021A/B Lecture 19: Micro- Ch. 19

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Michael Parkin

Document Summary

Equals wages, interest, rent, and profit earned in factor markets before paying income taxes. Equals market income plus cash payments to households. Equals total income minus tax payments by households to: total income by governments, after-tax income governments, the income lorenz curve. The income lorenz curve graphs the cumulative percentage of income earned against the cumulative percentage of households. If everyone has the same income, the income lorenz curve is a 45-degree line from the lower left corner to the upper right corner. This line is called the line of equality. The lorenz curve shows the distribution of income. A household"s wealth is the value of all the things that it owns at a point in time. The distribution of wealth is another way of examining the degree of economic inequality. A wealth lorenz curve measures the distribution of wealth.