The more the Lorenz line curves away from the diagonal (line of perfectequality), the greater the degree of inequality represented. The extreme case of perfect inequality (i.e., a situation in which one person receives all of the
national income while everybody else receives nothing) would be represented
by the congruence of the Lorenz curve with the bottom horizontal and right
hand vertical axes. Because no country exhibits either perfect equality or per
fect inequality in its distribution of income, the Lorenz curves for different
countries will lie somewhere to the right of the diagonal in Figure 5.1. The
greater the degree of inequality, the greater the bend and the closer to the bottom horizontal axis the Lorenz curve will be. Two representative distributions
are shown in Figure 5.2, one for a relatively equal distribution (Figure 5.2a) and
the other for a more unequal distribution (Figure 5.2b). (Can you explain why
the Lorenz curve could not lie above or to the left of the diagonal at any point?)