Which of these does a Lorenz curve compare?

A Lorenz curve is a graphical representation used to illustrate the distribution of income or wealth within an economy. Specifically, it compares the cumulative percentages of total income received by the cumulative percentages of recipients (such as households or individuals).

The correct choice highlights the distinction between equal income distribution and actual income distribution. An equal income distribution would imply that everyone has the same income, resulting in a straight diagonal line on the Lorenz curve. The actual income distribution, however, shows how income is distributed in reality, which often deviates from equality due to factors like varying levels of wages, investments, and ownership of assets. The more bowed the Lorenz curve is away from the line of equality, the greater the level of inequality in income distribution.

The other options involve aspects that do not directly relate to what the Lorenz curve measures. For instance, income levels and taxation rates do not reflect inequality directly, nor do education levels and participation in assistance programs provide insight into income or wealth distribution as represented by the Lorenz curve. Additionally, while wealth and income distributions can both be represented separately, the Lorenz curve specifically visualizes the disparities in income or wealth distribution, rather than comparing the two directly.