CAIE A-Level Economics 8.2.2 Equity vs efficiency

CAIE A-Level Economics 8.2.2 Equity vs efficiency
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise weighing fairer income distribution against incentive effects, efficiency losses and the case for redistribution.

How this is tested

  • explain when redistribution is chosen because equity is valued above efficiency
  • link higher tax rates to possible incentive effects for high earners

Question 15

[Maximum number: 1]

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

A

when control of demand-pull inflation is the priority

B

when equality is valued more highly than efficiency

C

when monetary reward is the best incentive to risk-taking

D

when the rich have higher marginal utility curves than the poor