Ib Questions on Microeconomics
Economics IB past paper questions Structural questions
1. (a) “The price elasticity of demand and the price elasticity of supply for many primary commodities tend to be low.” Explain what is meant by this statement, and how this contributes to the problem of price instability for primary commodity producers. [10 marks]
(b) Evaluate the view that it is best to allow primary commodity prices to be determined purely through the free interaction of market forces. [15 marks]
2. Explain what is meant by a production possibility curve and use a production possibility curve diagram to explain the concepts of scarcity, choice and opportunity cost.
3. A concert is to be held in a stadium with limited seating capacity. The organizers set the ticket prices at a level below the equilibrium price. Using a diagram, explain the possible consequences of their decision.
4. (a) Using an appropriate diagram, explain how negative externalities are a type of market failure. [10 marks]
(b) Evaluate the measures that a government might adopt to correct market failure arising from negative externalities. [15 marks]
5.With reference to the concept of economic growth, explain the difference between a movement along an existing production possibility curve (PPC) and an outward shift in a production possibility curve (PPC).
6. Explain why prices tend to be relatively stable in a non-collusive oligopoly.
7. Using a production possibility curve (PPC) diagram, explain the relationship between the economic concepts of economic goods, factors of production and opportunity cost.
8. Explain why the marginal revenue curve is identical to the average revenue curve for a firm in perfect competition but not identical for a monopoly.
9.(a) With the aid of at least one diagram, explain the difference between a movement along an existing demand curve for a good and a shift of the demand curve for a good. [10 marks]
(b) Evaluate the view that the market forces of
1. (a) “The price elasticity of demand and the price elasticity of supply for many primary commodities tend to be low.” Explain what is meant by this statement, and how this contributes to the problem of price instability for primary commodity producers. [10 marks]
(b) Evaluate the view that it is best to allow primary commodity prices to be determined purely through the free interaction of market forces. [15 marks]
2. Explain what is meant by a production possibility curve and use a production possibility curve diagram to explain the concepts of scarcity, choice and opportunity cost.
3. A concert is to be held in a stadium with limited seating capacity. The organizers set the ticket prices at a level below the equilibrium price. Using a diagram, explain the possible consequences of their decision.
4. (a) Using an appropriate diagram, explain how negative externalities are a type of market failure. [10 marks]
(b) Evaluate the measures that a government might adopt to correct market failure arising from negative externalities. [15 marks]
5.With reference to the concept of economic growth, explain the difference between a movement along an existing production possibility curve (PPC) and an outward shift in a production possibility curve (PPC).
6. Explain why prices tend to be relatively stable in a non-collusive oligopoly.
7. Using a production possibility curve (PPC) diagram, explain the relationship between the economic concepts of economic goods, factors of production and opportunity cost.
8. Explain why the marginal revenue curve is identical to the average revenue curve for a firm in perfect competition but not identical for a monopoly.
9.(a) With the aid of at least one diagram, explain the difference between a movement along an existing demand curve for a good and a shift of the demand curve for a good. [10 marks]
(b) Evaluate the view that the market forces of