IB Economics HL 3.4.9 Lorenz curve construction Question Bank

Explain two possible causes of income inequality in Indonesia.

Level

Marks

0

The work does not meet a standard described by the descriptors
below.

1

The written response is limited.

1-2

For one cause stated [1].

For two causes stated OR one cause explained [2].

2

The written response is accurate.

3-4

For one cause explained AND one cause stated [3].

For two causes explained [4].

Causes may include:
- inequality of opportunity; as place of birth, parental background, and other social factors differ
- different levels of resource ownership; owners of capital typically earn higher incomes
- different levels of human capital/skills; limited access to training or to education (e.g. in rural areas)
- discrimination (gender, race and others); women may not be promoted because expected to become mothers
- unequal status and power; market concentration leads to transfer of surplus from consumers to producers
- corruption; prevents redistribution, because funds are diverted towards those with political power
- government tax policy; could be regressive, e.g. sales tax
- government transfer policies; welfare payments to low-income families may be low in size and/or duration
- globalization and technological change; loss of employment in industries that lose their comparative advantage
- market-based supply side policies; deregulation and privatization may adversely affect wages
Any other valid cause.