WorksheetsIB Economics Review Quizz Feb 21
Total questions: 84
Worksheet time: 1hrs 10mins
What is short run?
The short run is when at least one input is fixed while others are variable
The short run is a concept that states that you will be able to change your plans
The short run is when you can change capital and labour and any factor of production
Salary given to permanent staff is an example of which kind of cost
fixed cost
variable cost
The best definition for fixed costs is
Costs that do not depend on the level of production
Costs that do not change
Costs that increase when you produce more
Cost per unit of output is
AC
MC
Marginal costs is
the cost added by producing one additional unit
the change in revenue added by producing one additional unit
the additional cost
The MC curve cuts AC at its
highest point
minimum point
The shape of AFC is
rectangular hyperbole
S shaped
Exchange rate depreciation puts..
Upward pressure on inflation
Downward pressure on inflation
You can represent cost-push inflation in a diagram through...
An inward shift of SRAS
An outward shift of SRAS
An inward shift of AD
An outward shift of AD
You can represent demand-pull inflation in a diagram through...
An inward shift of SRAS
An outward shift of AD
An outward shift of SRAS
An inward shift of AD
Which of these only has an indirect effect on exchange rates?
Higher domestic demand
Selling of foreign currency by private agents
Central banking selling foreign reserves
If 1 USD costs 4 BRL (1 BRL=0.25 USD) and the BRL depreciates the new exchange rate could be
1 BRL = 0.10 USD
1 BRL = 0.50 USD
A depreciation of a country's currency means for this country's residents that imported goods are
Cheaper
More expensive
An appreciation of a country's currency means that for foreigners this country's goods are
Cheaper
More expensive
The impact of a country's exchange rate appreciation in its current account balance is
Negative
Positive
What does the use of interest rates for domestic goals means
That the Central Bank can use it for affecting reserves of foreign assets
That the Central Bank can use it for affecting unemployment and inflation
That the Government can use it for spending more
When a country is receiving more capital flows, this puts a pressure on exchange rates to
Depreciate
Appreciate
Which of the following is NOT a Market Structure?
Perfect Competition
Oligopoly
Monopoly
Corporation
Public utilities are an example.
Perfect Competition
Natural Monopoly
Monopolistic Competition
Oligopoly
Command terms. What is... "Determine"
Obtain the only possible answer.
Offer a considered and balanced review that includes a range of arguments, factors or hypotheses. Opinions or conclusions should be presented clearly and supported by appropriate evidence.
Make an appraisal by weighing up the strengths and limitations.
Which of the following could be classed as a positive economic statement?
The government should place a higher tax on wealthy people
Unemployment should rise when income tax are continuously raised
Unemployment in Brazil is too high
Rich countries should donate more to poor countries
Which of these statements is normative?
Factors of production are necessary to generate economic activity
Scarcity is the foundation of the basic economic problem
The government should aim to improve employment opportunities
A mixed economy has the benefit of providing both merit and public goods
A
B
C
D
A
B
C
D
What is the impact of an increase of tariffs on imported goods for domestic producers
Government revenues will increase
Prices will decrease
Imports will fall
Domestic firms will produce more
What is a potential benefit of free trade?
More employment in sunrise industries
Specialization in commodity production
Less unemployment in sunset industries
Access to goods that are not produced in the domestic market
What is true about comparative advantage?
It was first thought out by the mathematician David Rimaro
A country can produce at a lower opportunity cost than another country.
A country can produce at a higher opportunity cost than another country.
Comparative advantage assumes that costs change and there is not a constant return to scale.
The Malaysian government buys a new Boeing 787 from the U.S. This transaction is recorded as
current account
financial account
official reserves
What is NOT a possible positive externality on development generated by insfrastructure?
Children can get to school becasue of an increase in roads and road quality.
Sewage and water treatment facilities increasing the health of the workforce.
Firms gain higher profits.
It helps farmers gain access to larger markets and hence, more profit.
Why did the Economist magazine choose the price of "Big Macs" to measure Purchasing Power Parity?
Big Macs are popular in many nations, people have heard of them
Big Macs are made the same way with the same ingredients in McDonald's restaurants worldwide.
McDonalds is present in nearly every nation, so there is data to be collected in almost every nation.
All of the Above
GNI per capita measures what?
How much national income a country earns per person, which includes income from all of a Nation's businesses located inside and outside of its home nation.
How much national income a country earns from all businesses within its borders, divided by its population.
Income inequality between rich and poor.
How many Genes each person is carrying.
What kind of economic integration arrangement has common policies on product regulation, and free movement of goods, services, capital and labour?
Common markets
Preferential trading area
Free trade areas
Custom unions
It is correct to say that countries within a customs union have...
Common external barriers
Common currency and a common central bank
Common policies on product regulation.
None of the above
The EU is better seen as an example of...
A Economic and monetary union
Free trade area
A Customs Union
A Complete Economic integration
(a) means ‘other things equal’. Another way of saying this is that all other things are assumed to be constant or unchanging.
Which of the following is NOT a limitation of the CPI?
Consumers changing their consumption patterns due to changing prices
Comparisons over long periods of time (more than 10 years) are difficult
Consumers tend to be loyal to particular products so their consumption patterns will not really change.
Not all consumers will consume what is in the 'typical' basket of goods and services
The purchasing power of your income is called your
real income
nominal income
The diagram represents which type of inflation?
demand-pull
cost-push
I. has no opportunity cost.
II. is supplied free of charge by the public agencies.
III. is produced by the state. **
I. total revenue will increase.
II. sales will fall.
III. expenditure will fall. *
I. increased exports from Mexico to the USA.
II. increased numbers of tourists from the USA to Mexico.
III. lower interest rates in Mexico, with higher interest rates in the USA.***
Is there a country who has a absolute advantage in the production of cloth?
Yes, China.
Yes, India.
No
Is there a country who has a comparative advantage in the production of shoes?
Yes, China.
Yes, India.
No
A
B
C
D
A
B
C
D
Taiwanese baseballs sell in the US for $10, but an identical domestically made one sells for $12.50. If the US government imposes a 20% tariff on Taiwanese baseballs, what would be the result?
Since the Taiwanese ball would still be cheaper, there would be little to no change.
Since the Taiwanese ball is now more expensive, US sales will likely increase.
Since the Taiwanese ball will now sell at the same price as the US ball, sales will likely equalize.
Since the Taiwanese ball is now more expensive, the US will begin exporting balls to Taiwan.
Based on this table, which statement BEST describes the situation?
Germany has an absolute advantage in both products, but Greece should still specialize in fish.
Germany has an absolute advantage in motorcycles, and Greece has an absolute advantage in fish.
Germany has an comparative advantage in motorcycles, but Greece has an absolute advantage in both products.
In this particular case, neither side would benefit from specializing more in one of the particular products.
The Panamanian balboa (currency) always exchanges at a rate of 1 balboa = 1 US dollar. The balboa has a(n)
floating exchange rate
appreciating exchange rate
depreciating exchange rate
fixed exchange rate
Higher interest rates
Make foreigners decide to buy more of a country's government bonds
Attracts portfolio flows to a country
Controls inflationary pressures
All the above
Which of the following is a limitation of CPI as a measure of inflation?
The basket of goods is never representative of all households
An index is inevitably inaccurate
Surveys are likely to be filled in inaccurately
There is a timelag between the data collection and release of CPI figures
Someone looking for a job having just left university
structural unemployment
cyclical unemployment
frictional unemployment
seasonal unemployment
The graphs show how consumer prices and real GDP changed in a country between 1995 and 2005. Which conclusion may be drawn from the graphs?
Living standards remained roughly constant between 1995 and 2005.
The level of GDP was lower in 2005 than in 2000.
The country experienced continuous economic growth between 1995 and 2005.
The price level fell between 2000 and 2003.
In 1979 in the UK the marginal rate of income tax imposed on the highest earners was 83% which increased to 98% if income was received from interest or dividends. By 1989 the highest marginal rate was reduced to 40%. Despite this reduction, the tax revenue raised from the highest earners increased substantially. Which theoretical concept illustrates this relationship between tax rates and tax revenue?
Laffer curve
Lorenz curve
Marshall condition
Keynesian AD/AS curve
Government monopoly
monopoly created and or owned by the government
the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same.
market structure in which the average costs of production are lowest when all output is produced by a single firm
a government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention.
