EcoHL P1 N02

EcoHL P1 N02 - c 1 hour IB DIPLOMA PROGRAMME PROGRAMME DU...

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ECONOMICS HIGHER LEVEL PAPER 1 Monday 4 November 2002 (afternoon) 1 hour N02/330/H(1) IB DIPLOMA PROGRAMME PROGRAMME DU DIPL&ME DU BI PROGRAMA DEL DIPLOMA DEL BI c 882-031 20 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. In economics, a good which is &scarce± is one which A. is provided by the government. B. has an opportunity cost. C. has increasing utility with consumption of it. D. is known as a Veblen good. 2. The diagram below shows a Production Possibility Frontier (PPF). Good X Good Y 0 PPF The PPF, in the short run, curves outwards because A. good X is an economic good and good Y is a free good. B. of the law of diminishing returns. C. good X is a capital good and good Y is a consumer good. D. of the law of comparative advantage. 3. Positive economics differs from normative economics in that positive economics is based on A. the assumption that the government should set priorities. B. rational economic behaviour. C. propositions that can be verified by empirical observation. D. the maximisation of economic welfare. ² 2 ² N02/330/H(1) 882-031
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4. The weekly balance sheet in $ of a one person business appears as follows: Total revenue 200 Rent 50 Wages 100 Interest Payments 25 The entrepreneur believes that he/she could earn a salary of $50 per week working for someone else. According to an economist, the entrepreneur has this week made a A. loss of $25. B. loss of $50. C. profit of $25. D. profit of $200. 5. According to a newspaper article, &Thai government measures such as export subsidies are intended to help small landholders in Thailand± . The action taken by the Thai government would be illustrated on a supply and demand diagram as A. a leftward shift of the supply curve. B. a rightward shift of the supply curve. C. a leftward shift of the demand curve. D. a rightward shift of the demand curve. & 3 & N02/330/H(1) 882-031 Turn over
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6. The diagram below shows the labour market for a particular country in which a minimum wage is introduced at W . m Wages Quantity of labour W S D ............................ ......................... ................... W m 0 The effect of the minimum wage will be A. unemployment . 1 q 3 q B. a labour shortage . 1 q 3 q C. that employment remains unchanged at . 2 0q D. an excess demand for labour. 7. Refer to the diagram below, which shows the market for widgets. & & & & & & & & & & & & & & & & Price Quantity private and external costs S private costs S D 0 A firm producing at price and quantity would be 1 P 1 Q A. allocatively efficient. B. creating positive externalities of production. C. receiving subsidies to increase supply. D. responsible for a misallocation of resources. & 4 & N02/330/H(1) 882-031 2 q 3 q 1 q 1 P 1 Q
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8. A student listens to music while doing economics homework. Another student also hears the music and enjoys it. This is an example of an external A. cost of production.
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EcoHL P1 N02 - c 1 hour IB DIPLOMA PROGRAMME PROGRAMME DU...

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