Cross-board concept practice · originally a CIE 9708 question, used here because the concept is the same. It is not IB Economics past-paper material.
Question 1
What is necessary to achieve Pareto efficiency?
Answer: C.
What this practice covers
Real questions, the answer key from the mark scheme, and the explanation that goes with it. Each one is marked the moment you pick, the correct option is shown whether or not you found it, and the full explanation opens either way. No account needed to answer them.
These questions are drawn from past Cambridge papers, mapped across to this topic because the concept is the same. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on the market's inability to achieve equity, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Treating equity and equality as synonyms.
- Claiming the market "fails" here in the same sense as with externalities. This is a distributional failure, not an efficiency one.
- Confusing income (a flow) with wealth (a stock).
- Confusing progressive with proportional taxation, progressive means the average rate rises with income.
- Stating flatly that a minimum wage causes unemployment, without qualifying for its size or for employer wage-setting power.
- Recommending a minimum wage for households with nobody in employment.
- Asserting a large efficiency cost to redistribution as if it were settled.
- Listing policies without evaluating any of them.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: The Market's Inability to Achieve Equity revision notes.