IB Economics HL 2.12.1 Free markets and inequality Question Bank

3. (a) Explain why the market system may not result in an equitable distribution of income.

Answers may include:
- definitions of market system, equitable distribution of income
- theory of why market systems may not result in an equitable distribution of income, for example private ownership of factors of production in the face of minimal intervention by the government may lead to unequal returns
- diagram to show an indicator of income equality/inequality, ie a Lorenz Curve diagram or a diagram showing income distribution by quintiles, deciles etc
- examples of economies with more unequal distribution of income, (eg Brazil), or less unequal distribution of income (eg Sweden).

Assessment Criteria

Part (a) 10 marks
0 The work does not reach a standard described by the descriptors below. ..... 0
1 There is little understanding of the specific demands of the question.
Relevant economic terms are not defined.
There is very little knowledge of relevant economic theory.
There are significant errors. ..... 1-3
2 There is some understanding of the specific demands of the question.
Some relevant economic terms are defined.
There is some knowledge of relevant economic theory.
There are some errors. ..... 4-6
3 There is understanding of the specific demands of the question.
Relevant economic terms are defined.
Relevant economic theory is explained and applied.
Where appropriate, diagrams are included and applied.
Where appropriate, examples are used.
There are few errors. ..... 7-8
4 There is clear understanding of the specific demands of the question.
Relevant economic terms are clearly defined.
Relevant economic theory is clearly explained and applied.
Where appropriate, diagrams are included and applied effectively. Where appropriate, examples are used effectively.
There are no significant errors. ..... 9-10