On the left is a Lorenz curve. It's a way of keeping track of income or wealth distribution in a country. The blue area below the curve illustrates the ability of people who already have a certain amount of income (low on the left, high on the right) to earn more money. It shows that people with the least wealth have the lowest capacity to generate more income, and those with the most income, the highest capacity to generate more. In a "perfect" world, everyone would have the capacity to earn more in proportion to what they have, but in fact, in most countries, the more you have, the easier it is to accumulate more. The difference between the** line of perfect equality** and the curve is a measure of inequality called the Gini coefficient. It's the area **A** divided by the total area under the line of perfect equality,** A = A/(A + B)**.

On the right is a **supply and demand curve** from economics. Markets for goods and services tend to reach an equilibrium point where supply meets demand at a stable price, the **market price**. The area between the demand curve and the market price is the **consumer surplus** – a count of "excess" consumers for whom there aren't enough goods. The area between the supply curve and the market price is the **producer surplus** – the number of excess "widgets" waiting for customers, or excess inventory.

There are two issues you will have to contend with that will complicate things. They are

- You will need to decide which curve is higher. That isn't often even a big deal. If you get it backward, you'll just get a negative area, and you can just change the sign.

- Sometimes the curves will intersect. You might only want to calculate the area enclosed by the intersections of two curves, for example, or your situation could look like the one below, with one limit of integration at an intersection point. You may have to find those points of intersection, and that will call for solid pre-calculus skills.

- Finally, the curves may cross in the interval in which you're interested, so you'll have to do more than one integral. All of these situations will be illustrated in examples below.

between **x = 1** and **x = 3**.

We don't really need to sketch a graph of these functions to know that they don't intersect. They're both parabolas with the same positive leading coefficient, and the y-intercept of the first is 2 units higher than the second. So we set up the integral

where

to give an easy integral:

Now we evaluate that integral

... and evaluate the limits to get the area:

Just for completeness, here's a graph of the functions of this problem and the calculated area. This is the most straightforward kind of area-between-curves problem.

The graph looks like this ...

In order to calculate those overlaps, we set the functions equal to each other and solve for x, which involves completing the square. (Don't forget completing the square!) Here's the whole thing:

That number, though nicely exact, will be a pain in the butt to plug into our integral result, so I'll calculate some decimal approximations and use them in the rest of the problem. Now the integral is

... and the solution is

which reduces to the area,

The graph of these curves looks like this.

Now the two curves, **f(x)** and **g(x)** intersect in three places, enclosing two regions. Notice the symmetry of this problem. The areas of the right and left enclose regions are the same, so we can (and always should) use that to our advantage. There's no need to calculate both areas. Just calculate one and multiply by 2.

The integral is set up like this:

The upper and lower curves are arranged so as to give positive areas, but we take advantage of the symmetry in this case to write

Here's the whole integral:

Now solve it to get

Evaluate the result at the limits:

And the area is

Now if this integral had *not* been symmetric about **x = 0**, we'd have to have done two integrals shown in the first integral equation. By the way, this is a great candidate for numerical integration on a calculator – lots of chances for mistakes doing it by hand!

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