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Poverty and Inequality — Exam Questions & Model Answers

Section 4.3.4 — worked exam questions with mark schemes, model answers and examiner commentary.

Economics · WEC14 · Unit 4 · 4.3.4

1 written question · 8 marks

Time estimates come from one constant per paper — Economics Unit 4 is 2 hours · 80 marks — not from a per-question guess.

This page examines 0 of 21 requirements in 4.3.4 Poverty and Inequality0.0%

Counted over the 1 written question on this page and nothing else — not the whole question bank, and not the revision notes, which are measured separately and are much better covered. 1 of them carry no spec tag yet, so this number is a floor, not an estimate.

21 requirements in 4.3.4 that no question on this page examines
  • ECON-4.3.4-1a The distinction between absolute and relative poverty.
  • ECON-4.3.4-1b Measures of absolute and relative poverty.
  • ECON-4.3.4-1c-1 economic growth
  • ECON-4.3.4-1c-2 education and training
  • ECON-4.3.4-1c-3 welfare benefits
  • ECON-4.3.4-1c-4 changes in tax structure
  • ECON-4.3.4-1c-5 structural changes in the economy
  • ECON-4.3.4-1c-6 aid
  • ECON-4.3.4-1c-7 civil wars and conflict.
  • ECON-4.3.4-2a The distinction between wealth inequality and income inequality.
  • ECON-4.3.4-2b-1 the Lorenz curve
  • ECON-4.3.4-2b-2 the Gini coefficient.
  • ECON-4.3.4-2c Causes of inequality in income and wealth within countries and between countries.
  • ECON-4.3.4-2d-1 enterprise
  • ECON-4.3.4-2d-2 incentives
  • ECON-4.3.4-2d-3 savings
  • ECON-4.3.4-2d-4 education
  • ECON-4.3.4-2d-5 migration
  • ECON-4.3.4-2d-6 life expectancy.
  • ECON-4.3.4-2e The impact of economic change and development on inequality.
  • ECON-4.3.4-2f The significance of the free market economy (capitalism) for inequality.

Exam questions

Every question here carries a tariff that exists in IAL Economics. Open the mark scheme before the model answer and you will see what the examiner is paid to look for.

  1. Examine8 marksAO1 · AO2 · AO3 · AO412 min

    Examine how the Lorenz curve and Gini coefficient are used to measure income inequality.

    Mark scheme
    Examine (8)
    Appendix 6: Requires knowledge, understanding, application, analysis and evaluation. Requires an explanation which includes a chain of reasoning, and diagrams where appropriate. Focuses on depth rather than breadth. Any relevant data provided needs to be interpreted. There should be a brief assessment of the arguments/factors/evidence.
    Level 1 — 1–2 marks
    Isolated knowledge and understanding. No application to the context and no chain of reasoning.
    Level 2 — 3–4 marks
    Knowledge applied to the context. A chain of reasoning is begun but not carried through; any data given is described rather than interpreted.
    Level 3 — 5–6 marks
    A developed chain of reasoning in context, with a diagram where one is appropriate. Depth rather than breadth; data interpreted. Assessment is implied rather than made.
    Level 4 — 7–8 marks
    A developed chain of reasoning in context AND a brief assessment of the arguments, factors or evidence — the clause that separates Examine from Analyse.
    Indicative content
    Knowledge: definition of Lorenz curve and Gini coefficient. Application: how the diagram works with example countries. Analysis: interpretation, limitations, comparison between countries.
    Model answer — 7–8 / 8
    What the marks in the margin meanKKnowledgeAApplicationAnAnalysis chain

    Para 1

    The Lorenz curve is a graphical representation of income distribution. The horizontal axis shows the cumulative percentage of the population (from poorest to richest), and the vertical axis shows the cumulative percentage of income received. K A 45-degree line represents perfect equality — where each percentile of the population receives the same share of income. The further the Lorenz curve bows below this line, the greater the inequality. K

    Para 2

    The Gini coefficient quantifies this inequality as a single number between 0 and 1. It is calculated as the area between the 45° line and the Lorenz curve, divided by the total area under the 45° line. K A Gini of 0 = perfect equality; a Gini of 1 = one person has all income. South Africa has a Gini of approximately 0.63, reflecting extreme inequality, while Sweden has a Gini of approximately 0.27, indicating relatively equal income distribution. A

    Para 3

    These tools are valuable for comparing inequality between countries and tracking how distribution changes over time within a country. An However, they have limitations. The Gini coefficient does not show where in the distribution inequality occurs — two countries can have the same Gini but very different patterns of inequality (e.g. one with a large middle class vs one with extremes). An Both measures also only capture income inequality, not wealth inequality, which is typically far more concentrated. An They also rely on accurate data — in countries with large informal economies, official income data may understate true inequality. An
    Examiner commentary
    Both measures are explained with correct technical detail and made concrete by South Africa against Sweden; a sketched Lorenz curve would earn the diagram credit. Level 4 is earned by the third paragraph, which assesses the tools rather than using them: the Gini hides where in the distribution the inequality sits, both measures ignore wealth, and both depend on data that a large informal economy distorts. Three limitations, each developed.
    Why this loses marks — a mid-band attempt at the same question

    Not a real script, and not written for this panel. It is 2 of 3 paragraphs of the model answer above, with “Para 3” removed. Nothing is rewritten. Open the model answer above and the difference is exactly the paragraphs named here.

    What the marks in the margin meanKKnowledgeAApplication

    Para 1

    The Lorenz curve is a graphical representation of income distribution. The horizontal axis shows the cumulative percentage of the population (from poorest to richest), and the vertical axis shows the cumulative percentage of income received. K A 45-degree line represents perfect equality — where each percentile of the population receives the same share of income. The further the Lorenz curve bows below this line, the greater the inequality. K

    Para 2

    The Gini coefficient quantifies this inequality as a single number between 0 and 1. It is calculated as the area between the 45° line and the Lorenz curve, divided by the total area under the 45° line. K A Gini of 0 = perfect equality; a Gini of 1 = one person has all income. South Africa has a Gini of approximately 0.63, reflecting extreme inequality, while Sweden has a Gini of approximately 0.27, indicating relatively equal income distribution. A

    The band this attempt cannot reach

    Level 4 — 7–8 marks
    A developed chain of reasoning in context AND a brief assessment of the arguments, factors or evidence — the clause that separates Examine from Analyse.

    Where it tops out instead

    Level 3 — 5–6 marks
    A developed chain of reasoning in context, with a diagram where one is appropriate. Depth rather than breadth; data interpreted. Assessment is implied rather than made.

    No mark is put on this attempt. The full answer above is marked 7–8 / 8 by its own commentary; what a truncated version scores depends on the script, and inventing a number for it would be the kind of false precision this page exists to avoid.

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