then Lorenz curve and gini coefficient

Question 1

what are the two main measures of income inequality ?

Answer 1

Lorenz curve and gini coefficient

Question 2

what are the costs of unequal distribution of income?

Answer 2

disincentives -Increasing levels of inequality can act as a disincentive for workers to work and be productive as there is a sense that society is unfair
living standards -If the inequality gap grows, the rich get richer and the poor, relatively poorer, which will reduce the standard of living
social stability -More equal societies tend to be more stable, tolerant and considerate, with lower levels of crime and better standards of living
Less equal societies tend to be characterised by political instability, strife, and social unrest, and in extreme cases this can lead to revolutions

Question 3

what is the loren curve the visual representation of ?

Answer 3

a visual representation of the income inequality that exists between households in an economy

Question 4

is perfect income ditrcibution the goal?

Answer 4

no as that would equate to socialism and completely remove incentives for work, as everyone would be paid equally

More equal income distribution is desired as it reduces poverty and social unrest