A Level Economics AQA Practice Exam

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Prepare for the A Level Economics AQA Exam with rigorous quizzes and essential study materials. Test your understanding with multiple choice questions, detailed explanations, and targeted hints. Boost your confidence to excel in your Economics exam!

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What does the Lorenz Curve illustrate?

The relationship between wealth and population size
The percentage of income earned by a percentage of the population
The ideal wage rates across different demographics
The distribution of job opportunities

The correct answer is: The percentage of income earned by a percentage of the population

The Lorenz Curve is a graphical representation that illustrates the distribution of income or wealth within an economy. It specifically shows the cumulative percentage of total income earned by the cumulative percentage of the population. The curve allows you to visualize how unequal income distribution is in a society; the further the curve is from the line of perfect equality (which represents an equal distribution of income), the greater the level of inequality. By plotting the percentage of income received against the percentage of the population, the Lorenz Curve provides valuable insight into income inequality, enabling comparisons between different countries or regions, as well as tracking changes in income distribution over time.