Changes

:OK, although realize that the Lorenz curve displays the relative distribution of wealth.  If the "poor" is defined only in relative terms (i.e., those making less money than others), then the Lorenz curve fits your explanation.  But if the "poor" is defined in absolute terms, as in people who can't afford to eat or obtain housing, then the Lorenz curve is not that helpful.  It doesn't say who is in true need and who isn't.  It only says what percentage of people have more money and what percentage have less.  Here's an example curve:

:OK, although realize that the Lorenz curve displays the relative distribution of wealth.  If the "poor" is defined only in relative terms (i.e., those making less money than others), then the Lorenz curve fits your explanation.  But if the "poor" is defined in absolute terms, as in people who can't afford to eat or obtain housing, then the Lorenz curve is not that helpful.  It doesn't say who is in true need and who isn't.  It only says what percentage of people have more money and what percentage have less.  Here's an example curve:

http://ingrimayne.com/econ/AllocatingRationing/MeasuringIncomeDist.html (Note the shape of the actual income distribution is different from the erroneous step function I described in Lecture 12.  Sorry!)

:http://ingrimayne.com/econ/AllocatingRationing/MeasuringIncomeDist.html (Note the shape of the actual income distribution is different from the erroneous step function I described in Lecture 12.  Sorry!)

4. Look again at Figure A. What is the opportunity cost of shifting production from B to C?  

4. Look again at Figure A. What is the opportunity cost of shifting production from B to C?