Microeconomics Revision (June 2023)

The diagram shows an economy’s PPC. The economy has moved from X to Y. What can be deduced from the diagram?

In cost-benefit analysis the term net social benefit refers to

Which two points indicate a move from a price inelastic point to a less price inelastic point?

Food prices in a country increased by 20% due to an infectious virus. Which statement is normative?

What is likely to affect the position of a demand curve for tickets to concerts but not the position of a supply curve?

The PES of yoghurt is +1.5. If demand for yoghurt rises and price rises by 20%, how much more will be supplied?

What is not a producer subsidy?

What is an argument against government intervention when there is market failure?

The PED for tea in many countries has risen. What is the most likely cause of this change in PED?

A maximum price is imposed on medical face masks, below the market equilibrium. What is the most likely effect of this?

Which example of consumer behaviour would create consumer surplus?

The PED for a firm’s product is zero.What will be the effect on the firm’s revenue if it reduces its price by 5%?

Which statement about maximum and minimum prices is correct?

When is the supply curve for a car manufacturer most likely to be price elastic?

Which change in output would be necessary to overcome the market failure shown in this diagram?

Which area represents the total cost to the government of this subsidy?

The diagram shows the demand curve and supply curve for a product. Which area represents producer surplus?

A key concept in classifying goods is whether a good is rival or non-rival. Which good is rival in consumption?

Which products are likely to have a positive cross-elasticity of demand with tea?

What is necessary to achieve the best allocation of resources using the price mechanism?

A government fixes a maximum price for a product to increase consumption.What would be the likely outcome of a policy?

The diagram shows a market for electric steel-plated switches used in houses. What could have caused a move from X to Y?

Have a look at this PPF diagram. Which statement is definitely correct?

What causes the demand curve for an inferior good to shift to the right?

The diagram shows the effect of a government subsidy. What is the result of the payment of the subsidy?

In this market, eye operations are provided free to the consumer. Which statement is correct?

Which type of tax used in different countries is a direct tax?

How can the concept of marginal utility explain the shape of the downward sloping demand curve?

S1 is the original supply curve, S2 is supply after a tax. How much tax revenue is earned by the government?

An economy is changing from a planned to a market economy. Which action would be expected during this change?