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IB Economics Microeconomics questions with actual answers.
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IB Economics Microeconomics questions with actual answers.
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IB Economics Microeconomicsquestions with actual answers.
Scarcity ANS -the condition that results from limited resources combined with unlimited wants
Opportunity Cost ANS -Cost of the next best alternative use of money, time, or resources when one
choice is made rather than another
Factors of Production ANS -resources of land, labor, capital, and entrepreneurship used to produce
goods and services
Land ANS -the physical location where production occurs. Includes bodies of water as well as resources
extracted from the earth.
Labor ANS -the work done by humans that is used in the production of goods and services.
Capital ANS -previously manufactured goods used to make other goods and services
Entrepreneurship ANS -the process of starting, organizing, managing, and assuming the responsibility for
a business
Market ANS -a group of buyers and sellers of a good or service and the institution or arrangement by
which they come together to trade
Demand ANS -The quantity of a good or service that consumers are willing and able to purchase at a
given price in a given period of time.
Consumer Demand ANS -The amount of a good or service a consumer is willing and able to purchase at a
range of prices.
Market Demand ANS -the demand by all the consumers of a given good or service
, Law of Demand ANS -the claim that, ceteris paribus, the quantity demanded of a good falls when the
price of the good rises
Demand Curve ANS -a graph of the relationship between the price of a good and the quantity
demanded.The Law of Demand implies that this curve is negatively sloped.
Determinants of Demand ANS -Anything other than price of the current item that influences consumer
buying decisions, including income, tastes and preferences, price of related items (substitutes and
complements), number of consumers in the market, and expected future price.
Supply ANS -The quantity of a product that producers are willing and able to produce at a given price in
a given period of time.
Market Supply ANS -the total of all individual suppliers' products in a market at a particular time
Determinants of Supply ANS -Anything other than price of the current item that influences production
decisions, including cost of raw materials, cost of labor, level of technology used to produce, number of
producers in the market, price of related products, and expected future price.
Equilibrium ANS -a situation in which the market price has reached the level at which quantity supplied
equals quantity demanded
Scarcity ANS -when a price is below equilibrium causing quantity demanded to be greater than quantity
supplied
Surplus ANS -when a price is above equilibrium causing quantity demanded to be less than quantity
supplied
Price Mechanism ANS -price signals which determines allocation of resources through interaction of
supply and demand
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