In the described inequality measure, what does 0 signify?

• A. Complete equality
• B. Complete inequality
• C. No data
• D. Cannot be determined

Answer: (A)

The main idea here is that this kind of inequality measure is designed so that zero means no disparity at all. When everyone has the same amount, the distribution is perfectly equal, and the measure outputs zero. In practical terms, the Lorenz curve would sit exactly on the line of equality, leaving no area between the curve and that line. So zero captures complete equality. Higher values reflect increasing inequality, with the maximum value representing the greatest possible disparity. It isn’t about missing data or being unable to determine something; those would not produce a meaningful measure of inequality.