First measure the gap, then judge it

Civics & Economics · Economics · ages 16-18

Name ______________________ Date ____________

On a Lorenz curve, what does the straight diagonal show?
- Perfect equality with no sag at all
- One household owning everything
- An empty country with no income
What is a quintile?
- Three unequal regions
- Five equal groups from poorest up
- Ten random households
A Gini of 1 means perfect equality.
Circle one: True False
Which is usually more unequally held, and why?
- Wealth, because yearly pay piles higher
- Income, because stocks concentrate slower than flows
- Wealth, because assets pile up across generations
Which curve matches a Gini of 0.5 rather than 0.3?
- A gentle sag near the diagonal
- A line above the diagonal
- A deep bulge far below the diagonal
What must you settle before arguing whether inequality is fair?
- Whether you count income or wealth, before or after tax
- Whether the flag has stripes or stars
- Whether economists are young or old
What is the strongest case that a level of inequality is too high?
- Poor children miss schooling and rules tilt toward the rich
- Rich children study too hard for fun
- Curves look prettier when they bulge
What is the strongest case that some inequality is useful?
- That gaps waste all skilled workers equally
- That fairness needs no measurement
- That gaps reward effort and risk, pulling people into training

Answer key

For grown-ups. Fold this page away before handing over the rest.

Perfect equality with no sag at all · The diagonal is the benchmark: each fifth earning exactly a fifth.
Five equal groups from poorest up · Ranked households split into fifths let you ask what share each fifth really gets.
False · Zero means perfect equality, while one household owning all scores a full one.
Income, because stocks concentrate slower than flows · Houses, savings, and investments stack over lifetimes, so wealth bulges more than income.
A deep bulge far below the diagonal · Bigger sag means the top fifth takes a much larger share, which reads as 0.5.
Whether you count income or wealth, before or after tax · Each choice tells a different story about the same country, so settle it first.
Poor children miss schooling and rules tilt toward the rich · Wasted talent plus captured rules slow demand and growth, which marks a level as too high.
That gaps reward effort and risk, pulling people into training · The useful-inequality case says rewards steer people toward enterprise and investment.