CAIE A-Level Economics A2 8.2.2 Equity Vs Efficiency Questions

Practise evaluating how redistribution and taxation can improve equity while creating incentives, efficiency and welfare trade-offs in A2 questions.

Exam points

Evaluate conflicts and trade-offs between economic efficiency and equity when governments redistribute income.

[Maximum number: 1]

When is a policy of income redistribution from rich people to poor people most appropriate?

when control of demand-pull inflation is the priority

when equality is valued more highly than efficiency

when monetary reward is the best incentive to risk-taking

when the rich have higher marginal utility curves than the poor

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