Chapter 3 - 1: Equity in distribution

From an economic perspective, horizontal equity is:

• Equal treatment of individuals with the same initial conditions

• Everyone is equal in terms of opportunity

• No one falls into poverty

From an economic perspective, vertical equity is:

• Those who are better off must contribute more and vice versa

• Everyone has equal obligations, but those who are better off contribute more and those who are disadvantaged benefit more from society

• Everyone has equal obligations and should not end up in a bad situation

According to the science of development, equity is:

• Equality of initial opportunity, results depend on the individual, the state does not intervene

• Equality of opportunity and the state intervenes to help individuals avoid bad outcomes

• Equality of opportunity and equality of results

Percentile Ranking is the way to arrange equal population groups in descending order of income

• True

• False

Compare the highest income percentile with the lowest income percentile to see the level of inequality in income?

• True

• False

The Lorenz curve always lies on the line of absolute equality

• True

• False

The shape of the Lorenz curve indicates the level of inequality among population groups

• False

• True

The Gini coefficient is another expression of the Lorenz curve, it is the ratio of the area formed by the Lorenz curve and the line of absolute equality to the area of half the square

• True

• False

The larger the Gini coefficient, the less the Lorenz curve is concave

• False

• True

Inequality can stem from

• Ownership of resources

• Distribution and personal capacity

• Random chance