Exam (elaborations)
IB Economics HL – Microeconomics questions with actual answers.
- Course
- Institution
IB Economics HL – Microeconomics questions with actual answers.
[Show more]
Seller
Follow
Content preview
IB Economics HL – Microeconomicsquestions with actual answers.
ad valorem tax ANS -An indirect tax where a given percentage is added to the price of a good or service.
allocative efficiency ANS -Occurs where the marginal social cost of producing a good is equal to the
marginal social benefit of the good to society. In different words, it occurs where the marginal cost of
producing a good (including any external costs) is equal to the price that is charged to consumers (P =
MC).
barriers to entry ANS -Obstacles that prevent a new firm from entering a market, such as economies of
scale, product differentiation, and legal protection.
break-even price ANS -The price where average revenue is equal to average total cost. Below this price,
the firm will shut down in the long run.
cartel ANS -A formal agreement among firms in a collusive oligopoly.
ceteris paribus ANS -A latin expression meaning 'let all other things remain equal' used by economists to
develop economic theories or models.
collusive oligopoly ANS -Where a few firms in an oligopoly act together to avoid competition by
resorting to agreements to fix prices or output.
common access resources ANS -Resources which have properties similar to public goods in that it is very
difficult or impossible to prevent people from using or consuming the resource. Therefore, they are
vulnerable to overuse and/or degradation.
complementary good ANS -Goods used in combination with each other, e.g. digital cameras and
memory cards. They have negative cross-price elasticity.
, constant returns to scale ANS -A given percentage increase in the quantity of all factors of production
results in an equal percentage change in output and thus no change in long-run average costs
consumer surplus ANS -The additional benefit or utility received by consumers by paying a price that is
lower than they are willing to pay.
corporate social responsbility ANS -An approach taken by firms where they attempt to produce
responsibly or ethically towards the community and environment, demonstrating a positive impact on
society.
cross price elasticity of demand ANS -A measure of the responsiveness of the quantity of one good
demanded in response to a change in the price of a related good. XED = %D in Qd of Good A/%D in price
of Good B
demerit goods ANS -Products that are considered to be harmful for people that would be over-provided
or over-consumed in a purely free market economy. Are generally considered to be products whose
consumption creates negative externalities.
decreasing returns to scale ANS -A given percentage increase in the quantity of all factors of production
results in a smaller percentage increase in output and thus an increase in long-run average costs
(diseconomies of scale).
demand ANS -The quantity of a product that consumers are willing and able to buy at a given price in a
given time period.
demand schedule ANS -A chart or table showing the quantity of a product demanded at each price. A
demand schedule, or a demand function, is used to draw a demand curve.
diseconomies of scale ANS -An increase in average costs in the long run.
economic costs ANS -The total opportunity costs of production to a firm, including the opportunity cost
of entrepreneurship.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Professorkaylee. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77764 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now