IB DP Economics: Measuring development – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – the IB holds copyright in its own papers. Use these alongside the official past papers available through your school or the IB store.

This set follows the IB Diploma Programme Economics guide (first assessment 2022, published February 2020), the course examined from the 2022 session onwards. It covers sub-topic 4.8, measuring development, for SL and HL; none of it is HL only. All countries, currencies and figures are invented. The guide does not allow calculators in Paper 1 and allows a four-function calculator or GDC in Papers 2 and 3. The marks below are a revision aid: the real papers use an analytic markscheme together with markbands.

The study guide and revision notes cover the content. See also the IB DP Economics hub, the printable checklist and the free diagnostics. Where a question needs index limits, use: income from 200 to 80,000, expected schooling from 0 to 20, mean schooling from 0 to 15, life expectancy from 25 to 85 (illustrative).

Questions

1. State one health indicator, one education indicator and one energy indicator used to measure development. [3]

2. Distinguish between economic growth and economic development. [3]

3. (calculator allowed) In Brindle, a basket of goods costs 1,800 brins. The same basket costs 600 units in a reference economy. The market exchange rate is 4 brins per unit. GNI per person in Brindle is 27,000 brins.

(a) Calculate the PPP rate. [1] (b) Calculate GNI per person at PPP, in units. [1] (c) Calculate GNI per person at the market rate, in units. [1] (d) Explain why the two answers differ. [2]

4. (calculator allowed) Country X has HDI dimension indices of 0.8, 0.6 and 0.4. Country Y has 0.6, 0.6 and 0.6.

(a) Show that the arithmetic mean is the same for both. [1] (b) Calculate the geometric mean for each. [2] (c) Explain why this matters for the way the HDI is built. [2]

5. (calculator allowed) Kelvane has life expectancy 70, expected schooling 14 years, mean schooling 9 years and GNI per person of 9,000 units at PPP.

(a) Calculate the health index. [1] (b) Calculate the education index. [2] (c) Calculate the income index using natural logarithms. [2] (d) Calculate the HDI to 3 decimal places. [2]

6. (calculator allowed) In Kelvane, GNI per person rises by 2,000 units, from 2,000 to 4,000. In another country it rises by 2,000 units, from 40,000 to 42,000. Calculate the change in the income index in each case, then explain why the HDI income index uses logarithms. [4]

7. (calculator allowed) Kelvane’s inequality losses are 8% in health, 20% in education and 25% in income. Its HDI is 0.676 and its dimension indices are 0.750, 0.650 and 0.635.

(a) Calculate the three adjusted indices. [2] (b) Calculate the IHDI. [2] (c) Calculate the percentage loss in HDI due to inequality, to the nearest whole number. [1] (d) Explain what this loss shows. [2]

8. Outline the three dimensions of the Gender Inequality Index and state what a higher value means. [4]

9. Distinguish between the Human Development Index and the Happy Planet Index. [4]

10. Ostmar and Delmere are fictional countries with the same GNI per person at PPP of 40,000 units and the same schooling (expected 16 years, mean 12 years). Life expectancy is 80 in Ostmar and 74 in Delmere. HDI is 0.866 in Ostmar and 0.833 in Delmere. Over the past decade Delmere’s real GNI grew faster, at 4% a year against 2% in Ostmar. Discuss the possible relationship between economic growth and economic development, using the data. [8]

11. Evaluate the use of the Human Development Index alone as a measure of development. [10]

Answers

1. Any suitable health indicator, for example life expectancy at birth [1]; any suitable education indicator, for example mean years of schooling [1]; any suitable energy indicator, for example the share of households with electricity [1]. [3] Examiner insight: “State” asks for a name only, so each indicator should be a measure that can be calculated; a vague word such as “healthcare” is not a measure.

2. Growth is a rise in real output, shown by real GDP or GNI [1]. Development is a wider improvement in people’s lives, including health, education, fairness and sustainability [1]. Growth can occur without development if gains are unshared or harm the environment; development includes outcomes growth does not capture [1]. [3] Examiner insight: “Distinguish” needs the difference stated, so write a linking phrase such as “whereas” rather than two separate definitions.

3. (a) 1,800 / 600 = 3 brins per unit [1] (b) 27,000 / 3 = 9,000 units [1] (c) 27,000 / 4 = 6,750 units [1] (d) The basket costs 1,800 / 4 = 450 units at the market rate, less than the 600 abroad [1], so prices are lower in Brindle and the same income buys more, giving a higher figure at PPP [1]. [2] Examiner insight: show the division in each part; a final figure alone leaves nothing to credit if it is wrong, and “explain” needs the reason (lower prices), not only the observation that PPP is higher.

4. (a) X: (0.8 + 0.6 + 0.4) / 3 = 0.6; Y: 0.6 [1] (b) X: (0.8 x 0.6 x 0.4)^(1/3) = (0.192)^(1/3) = 0.577 [1]; Y: 0.600 [1] (c) The geometric mean is lower for X because one dimension is weak [1]; so the HDI does not let strength in health or education fully make up for low income, or any other weak dimension [1]. [2] Examiner insight: compare the two countries explicitly; a general description of geometric means without reference to X and Y answers a different question.

5. (a) (70 - 25) / 60 = 45 / 60 = 0.750 [1] (b) Schooling indices: 14 / 20 = 0.700 and 9 / 15 = 0.600 [1]; average = 0.650 [1] (c) (ln 9,000 - ln 200) / (ln 80,000 - ln 200) = 3.807 / 5.991 [1] = 0.635 [1] (d) (0.750 x 0.650 x 0.635)^(1/3) = (0.3096)^(1/3) [1] = 0.676 [1] [7] Examiner insight: write the formula with the numbers substituted before the answer; this lets a reader follow your method if rounding an index changes the last digit.

6. Low case: (ln 4,000 - ln 2,000) / 5.991 = 0.693 / 5.991 = 0.116 [1]; high case: (ln 42,000 - ln 40,000) / 5.991 = 0.0488 / 5.991 = 0.008 [1]. The same 2,000 extra units raises the index much more at low income [1], because logarithms give diminishing returns: extra income adds less to living standards as income rises [1]. [4] Examiner insight: give both changes and a comparison; a statement about diminishing returns with no figures does not use the data supplied.

7. (a) Health 0.750 x 0.92 = 0.690 [1]; education 0.650 x 0.80 = 0.520; income 0.635 x 0.75 = 0.476 [1] (b) (0.690 x 0.520 x 0.476)^(1/3) = (0.1708)^(1/3) [1] = 0.555 [1] (c) (0.676 - 0.555) / 0.676 = 0.121 / 0.676 = 18% [1] (d) Unequal distribution within the dimensions lowers achievement, so average human development overstates how most people live [1]; income inequality is the largest contributor, so reducing it would raise the IHDI most [1]. [7] Examiner insight: in “what does this show” parts, tie the interpretation to the figures, here the 25% income loss, rather than repeating the definition.

8. Reproductive health, such as maternal mortality and adolescent births [1]; empowerment, such as women’s seats in parliament and secondary schooling by gender [1]; labour market, such as women’s labour force participation [1]. A higher value means greater inequality between women and men [1]. [4] Examiner insight: “Outline” is a brief account; naming a measure within each dimension supports the point, and the direction of the scale is a common slip.

9. The HDI combines life expectancy, schooling and GNI per person at PPP [1]; the Happy Planet Index combines life expectancy, reported well-being and inequality of outcomes with ecological footprint [1]. The HDI ignores the environment, whereas the Happy Planet Index includes it [1]. A higher HDI shows greater achievement, while the Happy Planet Index rewards long, satisfied lives achieved with a lighter footprint [1]. [4] Examiner insight: a contrast between the two indices is stronger than two separate descriptions, so check that sentences mention both.

10. Delmere grew faster than Ostmar but has a lower HDI [1], so faster growth did not give higher development [1]. With equal income at PPP and equal schooling, the HDI gap comes from health: indices 55/60 = 0.917 against 49/60 = 0.817 [1]. Possible reasons: Ostmar spends more on health care, or Delmere’s gains are unevenly shared or linked to pollution [1], and the HDI cannot show which [1]. Growth may also help later, since faster growth gives more revenue for health, and the data cover one point in time [1]. The HDI omits inequality, so the IHDI would help [1]. Conclusion: the link is positive but conditional on how growth is shared and used [1]. [8] Examiner insight: “Discuss” rewards balance and a conclusion; quote the figures supplied, and avoid claiming a cause that the data cannot prove.

11. Strengths: combines three dimensions rather than relying on income [1]; uses PPP, so income reflects purchasing power [1]; simple, widely available and easy to compare across countries and over time [1]; geometric mean limits offsetting between dimensions [1]. Limitations: omits inequality, so averages hide how outcomes are shared [1]; omits environment and sustainability [1]; leaves out freedom, security and other aspects of well-being [1]; limits and logarithm are choices, so rankings depend on judgement [1]; data quality varies between countries [1]. Judgement: useful as a first comparison, best used with the IHDI, GII and environmental indicators [1]. [10] Examiner insight: “Evaluate” asks for a supported judgement; strengths and limitations that are listed but never weighed against each other leave the final judgement unsupported.

Where marks are usually lost

• Writing about growth when the question asks about development.
• Leaving out the PPP rate calculation, or dividing the wrong way round.
• Forgetting to average the two schooling indices before taking the education index.
• Taking an arithmetic mean instead of a geometric mean when asked for the HDI.
• Stating that a higher GII is better.
• Writing a limitation of “it is not accurate” without saying why.
• Not using the data in a “discuss” or “comment” question.
• Giving an evaluation with no final judgement.
• Rounding too early, so the final index is slightly off.

Next steps

• Re-read the study guide for any part you missed, then rework the weakest questions.
• Use the revision notes for the final week.
• Check coverage on the IB DP Economics hub and the printable checklist.
• Try the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

IB Diploma Programme Economics guide, first assessment 2022, published by the International Baccalaureate Organization (February 2020). This page covers sub-topic 4.8.