Unit 2: Microeconomics
Topic 2.12: The Market's Inability to Achieve Equity Questions
Practice 20 exam-style questions for IB Economics Topic 2.12. Review the question stems below, then unlock the full Question Bank to access markschemes, model answers, and AI grading.
31 mark
Which of the following is a cause of income inequality?
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Explain two causes of income inequality within a country.
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Transfer payments by the government (e.g. unemployment benefits, pensions) are designed to:
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The difference between income and wealth is that:
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Explain how the Lorenz curve and Gini coefficient measure inequality.
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Explain how progressive taxation and transfer payments work together to reduce income inequality.
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Distinguish between income and wealth, and explain why wealth is typically distributed more unequally than income.
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Distinguish between equity and equality in the context of income distribution.
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Explain two methods the government can use to reduce inequality besides taxation and transfer payments.
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2026
Using a Lorenz curve diagram, explain how two countries can be compared for income inequality.
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2023
Using a Lorenz curve diagram, explain what the change in Tessaly's Gini coefficient shows about its income distribution.
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2023
Using a Lorenz curve diagram, explain how the universal pension changed the distribution of income in Tessaly.
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2026
Using a Lorenz curve diagram, explain how a country's income distribution changed between two years.
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2026
Using a Lorenz curve diagram, explain how transfer payments change the distribution of income.
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2026
Using a Lorenz curve diagram, explain how a more progressive income tax changes the distribution of income.
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A potential trade-off of income redistribution policies is between:
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