This final Unit 2 lesson addresses the market’s inability to achieve equity — even when markets function efficiently, the distribution of income and wealth may be deeply unequal. Anchored in the food delivery economy, students use the circular flow model to explain why free markets produce unequal distributions of income and wealth. They analyse how differences in factor endowments, human capital, bargaining power, and accumulated wealth generate persistent inequality, and evaluate whether government intervention to promote equity is justified when markets are not technically failing.
The CBCI progression builds from factual knowledge (constructing an annotated circular flow model showing income flows) through conceptual understanding (explaining why efficiency and equity are independent dimensions — a market can be allocatively efficient and deeply inequitable) to transferable evaluation of whether intervention is justified on equity grounds alone.
What is included:
Student resource (.pdf): 80-minute lesson with food delivery hook, circular flow construction, equity analysis tasks, Synthesis discussion, and Individual Application.
Teacher guide (.pdf): CBCI framework with Transfer Goal, model responses, common errors (e.g. treating equity and efficiency as the same concept), probing questions, ATL integration.
Syllabus alignment: 2.12 The Market’s Inability to Achieve Equity (HL only) — AO2. Covers: workings of the free market economy resulting in unequal distribution of income and wealth, circular flow model to illustrate why free markets result in inequalities.
This lesson completes The Econ Blueprint’s Unit 2 Microeconomics sequence.