IB Econ Micro revision 1

What is a market in Economics?

• A physical place where goods and services are sold

• Where consumers go to purchase goods and services that they want

• A place where buyers and sellers meet

• Any physical place where there are many sellers

For a product to be demanded which of the following conditions must be met?

• Consumers must need the good or service

• Consumers must have the money to pay for the product

  Consumers must have the money to pay for the product

• Consumers must want to purchase the product

• Consumers must be both willing and able to purchase the good or service

Demand can be described as:

• The quantity of goods and services that consumers are willing and able to purchase at a given price, ceteris paribus

• The quantity of products consumers are willing and able to purchase at a given time, at a given price, ceteris paribus

• The quantity of goods and services that consumers are willing to purchase at a time, at a given price, ceteris paribus

• The amount of goods and services that consumers are willing and able to purchase at a time, at a given price

What does the following diagram show?

• A rise in demand from Q2 to Q3 and a fall in demand from Q2 to Q1

• A contraction in demand from B to C and an extension in demand from B to A

• The changes in demand following a change in price

• Movements in quantity demanded

The diagram shows a demand curve for which type of product?

• A Super luxury good

• A basic necessity with some snob value

• An income elastic good or service

• A speculative good such as Central London property

Demand for bread will be most influenced by:

• Price of croissants and bagels

• Income tax levels

• Income levels

• The price of meat and fish

What factors might cause a rise in demand for public transport in a city?

• A fall in the price of public transport in the city

• A fall in income levels in the area

• A fall in the price of petrol locally

• An increase in the number of cycle lanes within the city

Europe has a relatively old and aging population.  Which firms are likely to see a rise in sales for their products in the future?

• Skateboards and roller blades

• Single storey housing

• Luxury apartment blocks

• Certain kinds of music e.g. Hip hop or Reggae

Supply is ______

• The quantity of goods and services producers are willing and able to produce at a given time, at a given price, ceteris parbus

• The quantity of goods and services producers are willing and able to produce ceteris paribus

• The quantity of goods and services producers are able to produce at a given time, ceteris paribus

• The quantity of goods and services producers are willing to produce at a given price, ceteris paribus

Which of the following might lead to a left shift in the world wide supply curve for Pepsi?

• A rise in the value of the US $

• A fall in aluminium prices

• A successful world wide advertising campaign for Pepsi

• A fall in oil prices