IB Econ G11 Micro

1. Which of the following are not included as one the nine central concepts.

• efficiency

• choice

• economic well-being

• equality

2. Which of the following is a factor reward:

• welfare payments

• child support

• rent

• pension payments

3. Which of the following explains why the PPF curve is not linear:

• The cost of transportation 

• Customers and producers have different tastes and preferences when it comes to consumption and production

• Companies cannot (in the short run) switch factors of production between the production of one good or service and another

• Factors of production are not perfect substitutes for each other

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

• Tastes and preferences

• Supply

• Income

• The price of substitutes and compliments

Which of the following is not a non-price determinant of supply?

• Demand for the good or service

• Changes in costs of factors of production (FOPs)

• Indirect taxes and subsidies

• Future price expectations

Which of the following is not a functions of the price mechanism

• Incentives

• Signalling

• Rationing

• Consumer and producer surplus

Which statement is true about allocative efficiency at the competitive market equilibrium?

• It represents the point where total consumer utility is maximised 

• It represents the point where producer surplus = consumer surplus and so social / community surplus is maximised

• It represents the point where marginal benefit (MB) equals marginal cost (MC)

• It represents the point when businesses are operating at the lowest point on the average cost curve

Price elasticity of demand is calculated by which of the following formulae:

• Change in demand / change in selling price  

• % change in price / % change in demand

• % change in demand / % change in selling price

• % change in quantity demanded / % change in selling price

Each of the following are determinants of PED except for:

• The degree of necessity

• Time

• The relationship between PED and total revenue

• The number and closeness of substitutes

A good has a YED equal to -1, it can be inferred therefore that the good is an example of a .................

• Elastic good

• Inferior good

• Normal good

• Inelastic good