Class 11 Economics Important Chapter 19 Measures of Dispersion

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Class 11 Economics Important Chapter 19 Measures of Dispersion

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Measures of Dispersion

Chapter: 19

PART – B : STATISTICS FOR ECONOMICS

IMPORTANT QUESTION AND ANSWER

Short Type Questions and Answers:

1. Who developed the Lorenz Curve?

Ans: The Lorenz Curve was developed by the American economist Max O. Lorenz to depict the distribution of income and wealth in a society.

2. In which year was Max O. Lorenz born?

Ans: Max O. Lorenz was born in the year 1876 and lived until 1959.

3. What is the Lorenz Curve used to study besides income and wealth?

Ans: Apart from income and wealth distribution, it is also used to study the distribution of profit, wages, turnover, production, and population.

4. What is plotted on the x-axis while drawing a Lorenz Curve?

Ans: The x-axis of a Lorenz Curve represents the percentage of cumulative frequencies, usually indicating the percentage of persons or households.

5. What is plotted on the y-axis while drawing a Lorenz Curve?

Ans: The y-axis of a Lorenz Curve represents the percentage of cumulative values, such as total income or wealth.

6. What does the diagonal line in a Lorenz Curve represent?

Ans: The diagonal line is called the line of equal distribution, showing a perfectly equal distribution of the variable under study.

7. At what angle does the line of equal distribution lie with the x-axis?

Ans: The line of equal distribution lies at a 45-degree angle with the x-axis on the Lorenz Curve graph.

8. What does the Lorenz Curve indicate when it lies further away from the line of equal distribution?

Ans: The further the Lorenz Curve is from the line of equal distribution, the greater the inequality or dispersion in the distribution.

9. In the given example, what percentage of persons get only 15% of the income?

Ans: In the example, 60% of the persons together receive only 15% of the total income, showing high inequality.

10. What does the point P(100, 100) represent on the Lorenz Curve?

Ans: The point P(100, 100) represents the situation where 100% of the population possesses 100% of the total income or wealth.

11. What type of curve is the Lorenz Curve?

Ans: The Lorenz Curve is a cumulative percentage curve comparing the share of population with the share of income or wealth.

12. Which axis range is used for plotting a Lorenz Curve?

Ans: Both the x-axis and y-axis are scaled from 0 to 100 percent in a Lorenz Curve.

13. What indicates uniform distribution in a Lorenz Curve?

Ans: Uniform distribution is indicated when the Lorenz Curve coincides exactly with the 45-degree line of equal distribution.

14. What is the first step in drawing a Lorenz Curve?

Ans: The first step is to arrange the data, accumulate both the size of items (e.g., income) and their frequencies, and convert them into percentages.

15. What is the measure of dispersion provided by a Lorenz Curve?

Ans: The measure of dispersion is indicated by how far the Lorenz Curve lies below the line of equal distribution the greater the distance, the greater the inequality.