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Free response question

Macroeconomics · Hard · 30 marks

IEO past paper: 2019 International Economics Olympiad, open questions

Economists often talk about two types of inequality: inequality of outcomes (such as income inequality) and inequality of opportunity.

(a)Give an example of inequality of opportunity. Explain why inequality of opportunity, as opposed to inequality of outcomes, is considered detrimental for economic efficiency and social welfare.[15](b)There are several well-established measures of income inequality, such as the Gini index. How would you go about measuring inequality of opportunity in a country?[15]

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