EcoHL P1 N04 TZ0

EcoHL P1 N04 TZ0 - c 1 hour IB DIPLOMA PROGRAMME PROGRAMME...

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ECONOMICS HIGHER LEVEL PAPER 1 Tuesday 9 November 2004 (afternoon) 1 hour N04/3/ECONO/HPM/ENG/TZ0/XX+ c IB DIPLOMA PROGRAMME PROGRAMME DU DIPL&ME DU BI PROGRAMA DEL DIPLOMA DEL BI 88045101 8804-5101 16 pages INSTRUCTIONS TO CANDIDATES ! Do not open this examination paper until instructed to do so. ! Answer all the questions. ! For each question, choose the answer you consider to be the best and indicate your choice on the answer sheet provided.
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1. Which one of the following can be described as a normative statement? A. The natural rate of unemployment is 4 %. B. Unemployment has fallen in the last year. C. Unemployment is too high. D. The level of inflation has increased in the last year. 2. To an economist, a free good is best described as A. a good which has no opportunity cost. B. a good which is available at no cost to a consumer. C. a good which has a negative opportunity cost. D. a good or service provided by the government. 3. The graph below illustrates the supply of computers in Canada. Price ($) 0 Quantity of computers A B S A movement from A to B may be caused by which one of the following? A. A fall in the price of machinery used to make computers. B. An increase in incomes. C. Increased subsidies to computer manufacturers. D. Improved technology in the computer industry. & 2 & N04/3/ECONO/HPM/ENG/TZ0/XX+ 8804-5101
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4. When there is a fall in the price of a good, A. the income effect is always positive. B. the substitution effect is always positive. C. the income effect is zero. D. the substitution effect is zero. 5. The following diagram illustrates the market for wheat in a country. Price Quantity & & & & & & & & & & & & & & & & & P minimum S 0Q 1 Q2 Q3 D The imposition of a minimum price for wheat at ±P minimum² is likely to lead to A. a shortage of wheat equal to Q1Q3. B. an increase in the quantity of wheat demanded of Q2Q3. C. an over-supply of wheat of Q1Q3. D. a fall in the quantity of wheat supplied of Q2Q3. 6. Which one of the following combinations best applies to a public good? No No D. Yes No C. No Yes B. Yes Yes A. Excludable Rivalrous & 3 & N04/3/ECONO/HPM/ENG/TZ0/XX 8804-5101 Turn over
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7. The socially efficient level of output is at which one of the following levels? 70 210 260 60 D. 50 190 240 50 C. 30 170 220 40 B. 20 150 200 30 A. External benefit Marginal private benefit Marginal social cost Output 8. A country moving from a centrally planned system to a market system is likely to experience which one of the following? A. A fall in unemployment B. An increase in inflation C. More equitable distribution of income D. An increase in the exchange rate of its currency 9. Study the following demand curve for good X. Price Quantity b D 0 At point b price elasticity of demand will be A. unitary. B. zero. C. infinity. D. variable. & 4 & N04/3/ECONO/HPM/ENG/TZ0/XX+ 8804-5101
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10. An increase in the price of petrol of 5 % results in the fall of the quantity of cars sold of 10 %.
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EcoHL P1 N04 TZ0 - c 1 hour IB DIPLOMA PROGRAMME PROGRAMME...

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