In the context of income distribution, what does the Lorenz curve measure?

The Lorenz curve is a graphical device used in economics to represent the distribution of income or wealth across a population. It plots the cumulative percentage of total income earned (on the vertical axis) against the cumulative percentage of the population, ranked from the poorest to the richest (on the horizontal axis), and is read against the 'line of perfect equality' — the 45-degree diagonal along which every cumulative share of the population would hold an identical cumulative share of income.

The farther the plotted curve bows away (sags) below that diagonal, the more unevenly income is spread across the population; a curve that coincides with the diagonal represents perfect equality. This bowed-curve-versus-diagonal comparison is exactly how the Lorenz curve is used to depict the degree of income inequality within a society, and it is also the geometric basis of the Gini coefficient, which is calculated from the area between the curve and the diagonal.

Contrasted against the offered alternatives:

• The total income generated within a country's economy is a macroeconomic aggregate (national income / GDP) measured through national-income accounting, not a distributional relationship between population shares and income shares.

• The concentration of wealth among the wealthiest individuals in society is a single-group indicator, such as the wealth share held by the top 1% or top decile, which captures one end of the distribution rather than the full population-wide relationship the curve traces.

• The proportion of income earned by different quintiles of the population is a related but separate statistic — a tabular, segment-by-segment breakdown — whereas the Lorenz curve instead plots CUMULATIVE income and population shares continuously across the whole distribution.

Hence, among the offered options, the Lorenz curve is best described as measuring the degree of income inequality within a society.