Year 12 IB Economics Microeconomics Quiz

Question 1

As you move down the demand curve (as price decreases), demand becomes less elastic.

Accepted Answer

True

Question 2

The law of demand states that as price increases, quantity demanded will...?

Accepted Answer

Decrease

Question 3

If the price of bicycles goes up, what will happen to the demand for helmets?

Accepted Answer

Decrease

Question 4

A perfectly elastic demand curve will be...

Accepted Answer

Horizontal

Question 5

If the PED of hot dogs is equal to 2, what elasticity of demand do hot dogs have?

Accepted Answer

Elastic

Question 6

Why would changes in the demand or supply of commodities lead to significant changes in price?

Accepted Answer

Because demand is inelastic and supply is inelastic

Question 7

How would a government typically deal with the excess supply generated by a price floor?

Accepted Answer

Increase demand by buying up all the reserves

Question 8

Which of the following is NOT a non-price determinant of demand?

Accepted Answer

State of technology

Question 9

If two goods are unrelated, their XED value would be...

Accepted Answer

0

Question 10

In the following diagram, which part is the producer surplus AFTER the price floor?

Accepted Answer

C and D

Question 11

Factors markets occur where...?

Accepted Answer

Factors of production are bought and sold

Question 12

A good is elastic when the percentage change in Price is greater than the percentage change in Qd.

Accepted Answer

False

Question 13

A supply curve with a PES value of zero will have what kind of slope?

Accepted Answer

Perfectly vertical

Question 14

Which of the following is NOT an example of market failure?

Accepted Answer

Over supply of merit goods

Question 15

What is the linear supply function?

Accepted Answer

Qs = c + dP

Question 16

Which of the following could be used to address a positive externality of consumption?

Accepted Answer

Education campaign

Question 17

Which of the following is an example of a price control?

Accepted Answer

Price floor

Question 18

The value of a specific tax is the vertical distance between the S1 and S2 curves.

Accepted Answer

True

Question 19

If the XED value is high and positive this means that...

Accepted Answer

Both goods are close substitutes

Question 20

If demand for a good is elastic, who will bear the main load of the tax burden?

Accepted Answer

Producers

Question 21

Which of the following is the correct definition of XED?

Accepted Answer

A measure of how responsive the Qd of Good A is in response to P of Good B

Question 22

If Qs is greater than Qd, you have...?

Accepted Answer

Excess supply

Question 23

Equilibrium occurs when Qs = ?

Accepted Answer

Qd

Question 24

When the PED value is the same as the PES value, the tax burden will be equally shared.

Accepted Answer

True

Question 25

If Sarah's income increases by 16% and her Qd for Black and Gold Kit Kats decreases by 10%, what is her YED?

Accepted Answer

-0.625

Question 26

What will happen to price and quantity of shirts if there is an improvement in the technology used to create clothing?

Accepted Answer

Lower price, higher quantity

Question 27

The formula for the Price Elasticity of Demand (PED) is as follows...?

Accepted Answer

PED = Percentage change in Qd/Percentage change in Price

Question 28

If Qs = -1000 + 5P and Qd = 4000 - 15P, what is the equilibrium quantity?

Accepted Answer

250

Question 29

If Qd = 550 - 6P, what is the quantity demanded when P = $3.50

Accepted Answer

529

Question 30

If a government imposes a $1 per unit tax on french fries, which one of these is NOT applicable?

Accepted Answer

Direct

Question 31

The following graph is an example of a...?

Accepted Answer

Price floor

Question 32

If a firm has unused capacity (ceteris paribus), their PES value will likely be...?

Accepted Answer

Relatively high

Question 33

In the following diagram, what is the total tax burden born by producers and consumers?

Accepted Answer

Rectangle (P3-P2) x Q2.

Question 34

If the Qs function is Qs = 800 + 400P, and changes to Qs = 600 + 400P, what would happen to the curve?

Accepted Answer

It would shift downwards

Question 35

In the following diagram, which part is the consumer surplus BEFORE the price floor?

Accepted Answer

E, C and B

Question 36

Sarah's YED was -0.625, this means the Black and Gold Kit Kats were...?

Accepted Answer

Inferior Goods

Question 37

The image below displays two graphs. Which one demonstrates a change in demand?

Accepted Answer

The graph on the right

Question 38

If Qs = -1000 + 5P and Qd = 4000 - 15P, what is the equilibrium price?

Accepted Answer

$250

Question 39

In the linear demand function, Qd = a-bP, if the value of 'b' was to decrease, what would happen to the slope?

Accepted Answer

Become more steep

Question 40

Was the firm sensible to lower it's price to $3.50?

Accepted Answer

Yes

Question 41

Which of the following is NOT a determinant of PED?

Accepted Answer

Mobility of the factors of production

Question 42

If the price of sneakers increased, what would happen to the supply of high heels?

Accepted Answer

Decrease

Question 43

If the Qs function is Qs = 800 + 400P, where does the supply curve intersect the price axis?

Accepted Answer

800

Question 44

If a specific tax of $2/kg of coffee and the new equilibrium quantity is 20,000kg, what is total tax revenue?

Accepted Answer

$40,000

Question 45

If the Qs function is Qs = 1200 + 6P, what quantity is being supplied at P = $8.

Accepted Answer

1248

Question 46

If there is an excess demand for flights to NZ, what will the price mechanism generate?

Accepted Answer

Higher prices at a lower quantity

Question 47

Which of the following reasons is NOT used to justify a subsidy?

Accepted Answer

Protection of employment

Question 48

Tax burden of consumers + tax burden of producers = total tax revenue.

Accepted Answer

True

Question 49

If the cost of production were to fall, what component of the supply function would change?

Accepted Answer

d

Question 50

If the PED of chocolate is 2 and the PES is 0.5, who will bear the greater tax burden?

Accepted Answer

Producers

Question 51

If a gelato store goes from selling 12,000 litres of gelato for $4 per litre to 14,000 litres for $3.50, what is new TR?

Accepted Answer

49,000

Question 52

Supply is...?

Accepted Answer

The willingness and ability of producers to supply goods and services

Question 53

What is the following graph called?

Accepted Answer

An Engel curve

Question 54

Negative externalities occur when...?

Accepted Answer

MSC > MSB

Question 55

Carbon emissions from manufacturing cars are an example of...?

Accepted Answer

A negative externality of consumption

Question 56

If a tax is imposed on a market, which way should supply shift?

Accepted Answer

Left

Question 57

If the price of frozen blueberries increased from $4 to $4.50, what would expect to see in the quantity supplied?

Accepted Answer

Increase

Question 58

If the change in price is 15% and the change in Qd is 10%, what is the PED value?

Accepted Answer

0.66

Question 59

Foreign holidays are an example of what type of good typically?

Accepted Answer

Normal

Question 60

In the linear demand function Qd = a-bP, what does the 'a' represent?

Accepted Answer

The quantity demanded if price was $0.

Year 12 IB Economics Microeconomics Quiz

Questions 60

Year 12 IB Economics Microeconomics Quiz

Questions 60