In the above figure, if the Lorenz curve were to move closer to ...

[tfester]

In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be
 
  A) more unequal.
  B) more equal.
  C) unchanged.
  D) More information is needed to determine how this change would affect the income distribution.

Question 2

The Coase theorem states that if transaction costs are low, the number of parties is small, and property rights are well established
 
  A) the government must intervene to eliminate any externalities in the market.
  B) private transactions are efficient.
  C) there will be no pollution.
  D) Both answers B and C are correct.

[Harbringer]

Answer to Question 1

B

Answer to Question 2

B