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AP® Microeconomics · Unit 6 · Topic 6.5

Inequality: Topic Checklist (Microeconomics 6.5)

Specific “I can…” statements for inequality, from Lorenz curves and the Gini coefficient to tax structures and sources of inequality, each linked to the guide section or practice question that tests it.

Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.

Understanding

  • I can explain the difference between income (a flow) and wealth (a stock), and say why wealth is usually more unequal. (Guide: “Why markets can produce unequal outcomes”; Practice Q7)
  • I can describe how income levels and poverty rates vary within and between groups and countries. (Guide: “Income levels and poverty rates”)
  • I can explain what the line of equality, a Lorenz curve and the Gini coefficient each show. (Guide: Figure 1 and “The Gini coefficient”; Practice Q3)
  • I can explain why efficient market outcomes can still be unequal. (Guide: “Why markets can produce unequal outcomes”)

Calculation and reading data

  • I can read a Lorenz curve or its table to find the share of income received by the poorest or richest part of the population. (Guide: Worked example 1; Practice Q1)
  • I can calculate a poverty rate and compare rates between groups. (Practice Q7)
  • I can calculate the value of a factor’s marginal product and use it to compare incomes. (Guide: Worked example 2; Practice Q5)
  • I can calculate average tax rates and classify a tax as progressive, proportional or regressive. (Guide: Worked example 3; Practice Q2, Q6)
  • I can find how a tax changes the ratio between high and low after-tax incomes. (Guide: Worked example 3(b); Practice Q6)

Reasoning

  • I can compare inequality across countries, policies or time periods using Lorenz curves and Gini coefficients, without confusing shares with income levels. (Guide: Worked example 1(c) and (d); Practice Q1, Q3)
  • I can identify and explain human capital, social capital, inheritance, discrimination, access to financial markets, mobility and bargaining power as sources of inequality. (Guide: “Other sources”; Practice Q4, Q7)
  • I can explain how owning capital turns wealth into income and can widen inequality over time. (Guide: Worked example 2(d); Practice Q5(c))

All ticked? You have reached the end of the course. Go back to the course roadmap and revisit any unit that still feels shaky.

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