Absolute advantage means

A country can produce more X than their trading partner

Unit elastic demand will

have identical TR values at each point

Deadweight loss always indicates

a loss of efficient outcomes in the market

An ad valorum tax will

make the supply curve more inelastic

Which of the following describes the tragedy of the commons?

If property rights aren't clear, people overuse public goods

Comparative advantage means

A country has lower Opp. Cost for X than their partner

An increase in income will

increase demand for normal and decrease demand for inferior

the market is full of unsold merchandise

Tax revenue can be found on the graph by...

(new equilibrium down to old supply)*q

Which of the following is not a determinate of PED?

how much utility consuming that product provides

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IB Basics/Microeconomics

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#IB #Micro #microeconomics Basic conceptual review, suitable for both SL and HL students.

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Questions 32

Answers

1
A negative YED means
The goods are normal
the goods are complements
the goods are inferior
the goods are substitutes
2
If income increases, quantity demanded of this good will decrease.
substitute
inferior
normal
complement
3
A negative externality of consumption would have (analyze quantity)
MSB > MPB
MPC > MSC
MSC > MPC
MPB > MSB
4
Absolute advantage means
A country can produce less X than their trading partner
A country can produce more X than their trading partner
A country has higher Opp. Cost for X than their partner
A country has lower Opp. Cost for X than their partner
5
An effective price floor will
create a shortage
benefit consumers more than producers
raise prices for producers
fall below the equilibrium point
6
Unit elastic demand will
have a PED = 0
not change Qd even if supply shifts
have an upward sloping demand curve
have identical TR values at each point
7
Deadweight loss always indicates
there is a specific tax
a loss of efficient outcomes in the market
there is an ad valorum tax
there is an externality of production or consumption
8
Which idea represents firms producing more coats before winter, and more shorts before summer?
resource costs
expectations
government intervention
technology
9
Veblen goods
all of the above
generally luxury goods
disobey the law of demand
are goods that increase in Qd as price increases
10
A specific tax is
applied to consumer incomes
a fixed amount per unit sold
applied to firm profits
relative to the good's value
11
An ad valorum tax will
increase total surplus
make the supply curve more inelastic
be a constant quantity
increase Qd
12
Public goods are both
opportunity cost and trade off
non-excludable and non-rival
substitutes and complements
normal and inferior
13
Which of the following describes the tragedy of the commons?
Fishing is better than farming
McDonalds food has negative health consequences
If property rights aren't clear, people overuse public goods
Public spaces can be used by anybody
14
If the price of one good increases, quantity demanded for this other type of good decreases.
inferior
substitute
complement
normal
15
Comparative advantage means
A country has higher Opp. Cost for X than their partner
A country has lower Opp. Cost for X than their partner
A country can produce more X than their trading partner
A country can produce less X than their trading partner
16
If supply and demand both shift out, then which of the following must occur?
constant price, increase quantity
quantity increases
price increases
price and quantity both increase
17
Allocative efficiency means
we cannot benefit one group without harming another
MC = P
total surplus is maximized
all of the above
18
The economics questions in this economy are answered by the government.
Planned economy
Free market economy
Mixed economy
Traditional economy
19
A straight PPC implies
comparative advantage
constant opportunity costs
some resource isn't limited
increasing opportunity costs
20
An increase in income will
increase demand for normal and inferior goods
decrease demand for normal and increase demand for inferior
decrease demand for normal and inferior goods
increase demand for normal and decrease demand for inferior
21
A good with perfectly elastic demand will
have a downward sloping demand curve
have a vertical demand curve
have a positively sloping demand curve
have a horizontal demand curve
22
Firms can sell the right to pollute if they pollute less than the legal limit
Pigouvian tax
Common pool resources
Cap and trade
Regressive tax
23
Excess supply means
Qd > Qs
the market is full of unsold merchandise
supply shifts out
price is too low
24
Which of the following will not directly shift the demand curve?
household income
change in price of substitute goods
labor prices
consumer preference
25
Tax revenue can be found on the graph by...
(new equilibrium - old equilibrium)*q
(new supply - old supply)*q
(new equilibrium down to old supply)*q
(old equilibrium up to new supply)*q
26
A positive cross price elasticity of demand means
the goods are inferior
the goods are normal
the goods are complements
the goods are substitutes
27
Which of the following is not a determinate of PED?
how many alternatives goods exist
how long the consumer has to make a choice
how much utility consuming that product provides
how expensive the product is
28
A positive externality of production would be (analyze quantity)
MSB > MPB
MPC > MSC
MPB > MSB
MSC > MPC
29
Which of the following is an artificially scarce good?
Gold
bus tickets
Costco membership
Netflix
30
Which of the following is a pure public good?
Police
the MRT
Public school
Movie tickets
31
Demerit goods are
almost always normal goods
generally over produced
increase social outcomes
sold in black markets only
32
If supply shifts in and demand shifts out, which of the following must occur?
price and quantity both increase
quantity increase
price increase
quantity is constant, price increases

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