On a Lorenz curve, which axis shows the cumulative share of population?

• A. Horizontal axis represents the cumulative share of population
• B. Vertical axis shows the cumulative share of population
• C. Diagonal axis
• D. The axes show income level

Answer: (A)

The horizontal axis represents the cumulative share of the population. As you move along the bottom from left to right, you’re adding more of the population (from 0% to 100%), and at each point you read off what portion of total income is earned by that portion of people on the vertical axis. The vertical axis shows the cumulative share of income (or wealth) owned by that portion of the population. The diagonal line from origin to top-right is the line of perfect equality, and the Lorenz curve typically lies beneath it, illustrating inequality. The option that suggests income level or a diagonal axis is not correct because the axes reflect shares, not absolute levels, and the diagonal is a reference line, not an axis.