AP Microeconomics / Unit 6: Market Failure and the Role of Government
6.5 Inequality
Notes
- Lorenz curve: farther from the line of equality = more inequality.
- Gini coefficient: 0 = perfect equality, 1 = perfect inequality.
- Policies: progressive taxes, transfer payments, minimum wage.
- Tax types: progressive, proportional, regressive.
Practice
A Gini coefficient of 0 means:
Everyone has the same.
A tax that takes a higher percentage from high earners is:
Rate rises with income.
A sales tax on food is usually:
Larger share of low incomes.
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