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Paper 3 Practice

Economics IB HL Practice

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Shreiyas Saraf
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81 views88 pages

Paper 3 Practice

Economics IB HL Practice

Uploaded by

Shreiyas Saraf
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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celal IB DIPLOMA Economics PAPER 3 WORKBOOK parties Contents The foundations of economics Section 1 Microeconomics 1.1 Competitive markets: demand and supply 1.2 Elasticity 13 Government intervention 14 Markee flare 1.5 Theory ofthe firm and marke structures (HL only) Section 2 Macroeconomics 21 The level of overall economic activity 2.2 Aguregate demand and aggregate supely 2.3 Macroeconomic objectives Section 3 International economics 311 veational trade 3.2 Exchange rates 3.3 The balance of payments 3,4 Teams of trade (HL only) Mock exam practice paper 38 38 a 4 54 st 37 6 67 Noe: answers ate avalible free online at wiv hoddereducatoncomiBextas The foundations of economics 1 Thediagnm below shows the production poly nies (PP) curve fran economy 1 Brplin why the PP cave ie drown ar conven the xg, a ine ts 1 Bri ctlne the opportunity cost othe economy if produces OC nis of consumer god, a {Explain which af the three points (, For) indestes tha the economy cold increase cups without ineuing any opporeniy cas. a 2A dent cuenthy pid an als of 180000 Shei considering fee which she expect to have poten yeteraes of $900,000 per yar Teo 000. {Calculate the ecouning prof ifthe det ses up her omc a ing per own dental cline al tal ort rest be Clete dhe ttl ee ne profi f the dents es up her own clini “ ‘The foundations of economics ¥ ‘© Outne whether the dent should 2 ecnomi round open her wm clini 2 3 Use the data in he ae below to cleat the opportunity cox prac one nif inven gods ‘seme consti goods a 4 ‘The able below shows the various combinations of rodcing laptops and televisions fora fim, Clete he opportunity con of rong one unit of eleison a 36000 54.000 55 The able low show the proton politi fr fae 2 Cala the oprctnty cor tothe farmer of prong each eta | kgf sabes. a 1 Cleat dhe opperunity cose the famerf increasing the plac of pests fom 740 Kg woke a Microeconomics 1.4 Competitive markets: demand and supply Demand 1 Theliner dn fan Gr smarphones given a6 Qi a~ BP Explain what his show, “ 2 Using fly labeled diagram ploa dena cuve rm the given liner demand function qi e00- 257, 2 Economics forthe ib Bolom Paper 3 Workbook 5 From the dagam below ve the linea faction ofthe demand curve a “4 Suppor the dally demsnd or orn chicken aca supermarket piven by the fnction d= 420— IP Calle he dy eveue from the ale of orn chicken the pice $8 per ilo, a '5 Wich ference tothe dam below calculate the chang inthe value ofsale revere ifthe fr ies its prc fom $710 $8, aricomment on your dings « any demanded) 2 Suppee the suply cuvefor a cestain peda given bythe fnetion Qe = 300+ 1 redhnolgial ropes enables 200 more nis tobe produced at each pice level, how the new linear fancion ofthe supply uve a Section | Misossonomis 3 Supply 1 Thempy ve fra parca poi gen a) = 80 +20 Clee he vet re hat wkd ena asad lines ries wong et ed 4 Economies forthe 8 Diploma Paper 3 Workbook 4 Explain which othe flowing supply curves would ke ater Qh = 40+ Per iy = 4) BP. o 5 Staiy the supply curve below and eae ie inert ‘ua upte Market equilibrium “1 Cate che vale ofthe rota area of exces supply inthe diag below ifthe prices S15 a re) ‘any ded ot ‘enaayna bind Section | Migoeconomi $ 2 Cleat he vals of he rule of exe demand at 10 in the dg blow a ‘uae ns) 3. Thetale below shows the demand and suply chal for aproduct A Glin production cont inzees supply by 20 us call prices, Calaate the new qulibriom pice. a 6 0 7 4 Cale the egltium pice and quay ifthe demand function ive a8 QH= 600 3P and the suppl fant is Qs = 100 +22 Bl 6 Economics forthe 8 Diploms Paper 3 Workbook. 5. Suppose the demand function fora prc is glven as Qu = 8D ~2P white spy expres a Qe = 2. ‘2 Potthe demand and ply curves and wey the equiliscium pce nd equip, bb Use your raph fiom Question Sato calculate the value ofthe consume spa athe equim pice. 2) -€ Calla the quansty of exces demand a price of $10 pt unit. a = Section 1 Microeconomics 7 Cael he quay of exces ply apie of $90 pr uit a 1.2 Elasticity Price elasticity of demand (PED) 1 Juke Ld sl 200 us fits reser each dy a pie of $4, with known prise ela of demand of-20 2 Calle uke Led sales even ot 1 Calcul he new sales revenue ik Lid cress se by 20%. a «© plain whether asin its ie wasa good deco fo Joke Li a | 2 Inthe aya below, Point x represents the mid-point the demand cue i ‘ unt emda 4 See the val of he pice elas demand a Point x 18 Economics forthe Ib Diplome Paper 3 Workbook Explain what wll upen to total evenue ifthe rice fl Below $10. 2 3 From the dia blow fra given product comment onthe vale ofthe rc ly of demand or the pode. 4 Suppose dhe demand fos god given by the faction Qa = 400-25 | Cafu the price dticty of demand (PED) fr the good fhe price incense $4 $5 and ‘hen fon $1003 Using youransnes to Quetion 4. explain what happens othe valve ofthe PED fora god with near dena fanetion nthe price fhe ood increases cy {che vl ofthe PSD = -1, explain what che fect wil be on them’ total revenue fit redces price by 5, Section | Microeconomics 9 '5Suly the demand chal below and newer the ution tallow, 2 Ploche dearer b 10 Economics forthe 18 Diploms Paper 3 Workbook Using separate raph ple the tal revenue curve under the demand curve in Qution $0, a «© Using your understanding ofthe concept of price clay of demand explain why total revenue ‘merimiznd atthe midpoint ofa inn demand curve ies $5 the sve cea, » Cross price elasticity of demand (XED) 1 Explain why the cos pric bs of demand (XED) fc complement gods i negate. a ea 2 Calclate the val ofthe XED ithe price of MeDonali cof fll by 8% and in the following time period ‘tisoberved thatthe demand or Starbuck fee declines by 2 2 Section 1 Miroeconomics 19 3 The price of monthly dpsabl contact nss increas am $24.50 to $26.95 per pck I olarved chat, ‘he demand for ont ns solution subsequently flo 25 boxes to 20 boxes per month, Clete theca rice elastiy fdemand and comment on your findings. o 4 Sty the diagrams below dat how the demand fo and supply of iat swimeing esone ad og. Cale the cos price laity of demand fo goae the ece of private swimming leone es sk {40330 conmenc on your figs “ Sig en ones vant per went 132 fconomics for the 16 Dplons Paper 2 Workbook 5 Thetatleelow shows the pie and quate demanded for wo proses, Aan B, Caen the XED when the price of rode A false $5 0 94.50 a Income elasticity of demand (YED) 1 Gale he income clay o demand (YED) fo taf 3% incre in eal ose income causes sles fate fmm 100 milion o 101 lion units Comment on what his sugges abut tas pot. 2 Assume theincome elasticity of demand for cites in paticlr country iskaown tobe 40.14 2 there isa 3.5% intense in el houschol income, explain what happens tthe demand fr cites. 2 'b Using your answer wo Question 2a rely explain what she fg sug abet the demand fr iets inthar cunt. a 3 Sopra thaieal household income in ances expected ote bj 1% this yt Caleult the sales volume forth following eoduce Chane pfu, pven sales of 5.00 unis in the previous year ard known necme east of demand 13.25 e Section 1 Microeconomics 13, 1 Cefur own branded ex vale ung, a known income elastic of demand of 6 & 4 Sappone na country the average anna income increas fom $2800 o $2,400, which renin the ‘erage household incesing the numberof cinema vss ram to 8 tinea yest Calelte the YED fo vss tothe cinema and coment on ou find. o '5 Say the etimates ofthe YED fee varios procs inact then rae the questions hat fellow. = 1035 Stns 033 Done tae | o1.36 [Pic wagorston | 022 2 enn one infrirpod ancl oe huey goes othe produ shown in dhe table. ct ' Esplin which ofthe given soplets wal gin the moet from an conc boom, a | : | Explain which ofthe given spies would gin the ms frm an economic downturn (receson osu)" a 4 average household income increas by 3.5% calculate the percentage change inthe demand fo ( uli tranportton an dome hls, a “18 Economics forthe IB Diploma Paper 3 Workbook ‘© Using the figures inthe table, expan why the goverment more inclined tx perl (gs) athe than ‘ox providers of domestic hla 1 Price elasticity of supply (PES) 1 Calculate dhe valu of rc elastic of sy fom the diagram below rice res rom $25 0830. at all st uated conta) 2. The dll demand nd ply functions for ues aa mara ane ae expres as Qd = 100 10P and Qee-50 4208 2 Caelote the equliam price and que a 'b Camp the Quit demanded and Quay pling clu in he tbe blow et «© Caelae the pie elas of uly (PES) price nce fom $5 to $6 per banger. a Section 1 Migoeconomics 15 {Comment on your anes to Queton 2e (the vale ofthe PES). m Asumes rival houog tnd causes the demand ets tthe mask sta ofl by 15 uit at all rie evel, Determine the equation ofthe new demand fineton. ™ 4 Caklate dhe new euilibim rice and quan, o 2 Angry Bis sa bighly poplar veo game rae by Frnsh company Rovio Moe than 1 ilk cistomens Ihave pid $0.99 each to download the pune rom Apples App Sore, With che we of an appropiate grams, ‘span why he high level of dena fr Angry Brest let onthe seling pe w 4 Theprice of strane mele $6 andthe daly gusty spi 400 eas the PESis own co tbe +125 cleat how a fallin pce to $5.40 permeal wlth guantyupled,ctersprbs. (2 16 Economics for the 18 Diploma Paper 3 Workbook 'b The soppy curve fora purislr Chane! handhg ie shown nthe agra ko, aan cones 1 Hen the intended sles of Chanel handbags a» ni prise of 2,000. ” Clee he value ofthe pice clas ful for Chanel hands price quale fom $2,000 $8000, e |W. Wich reference tothe diagram, expan why har handbags ade by Chanel have asteep -weply cave a 5 Supose the ouput of eath produc give by the supply nctin Qs = 180+ SP Answer the qutons that low. 1 Cael the pie requied inode for he prot to be ppl a b Calelte he price elasicity of ply (PES) ifthe pice os om 4010 45 a Seaton | Microeconomics 17 {¢Caeoe the PES ifthe pice of he skh prod ill rm 48 to $46. a Explain why the PES othe heath proce might be so price eli a 1,3 Government intervention Indirect taxes/Subsidies/Price controls 1 Thetable below shows the demand and suply halle for Produc Y. 1 Lent the equa price of Pre o sooo [ra 12000, 25000 | 15 | 6000 2000 | 20 | 209000 15900 | 25 | 24000 s0000 | 30 | ago0o 000_[ 35 [32.000 Define here ice cng a {© ri explain che impact the goverment imgvig pice cling of $25 fr Product. a 2 The tale below shows the demand (CQ) and ugly (Qs) sheds or Pct X 2 deny the ei pice ofProdtX. 5.000 7000 7.000 5.000 “18. Economics forthe 18 Diploma Paper 3 Workbook State theamoun of excess ply ata pice of 85 per uni o ‘© Assume that ihe government impose apie of $2 er uit on Produce X, Cate the new ‘eulicom ps a 6 Caleue deta cx evenue payable othe government. a © Outline how mach ofthe tax incidence i bomeby the consumer. a 3 The table below sows the demand (Qi) and spp (Q) schedules for rod 1 Keni theequixum peice and quantity a soon [75 | soso 900 {70 | anson coow | 60 | creo Suppose he poremment grants subi of SI per uit the pode of Pouct 2. Cael the new ‘liom pete any o «Calculate theta costo the government of sing on the subsidy tothe roducersof Product. Section | Micoeconomicr 19 4 Determine the vale ofthe ineience ofthe sti that pated on othe consumer of Prot 2. 4 Refer the diagram below and snawe the questions tat follow. ‘ua ante Calculate he telex revenue colecredby the goverment from the imposition of the te Cale he incidence of ex pid by the consumes {© Cake the change in consumer speningflloming the imposition of thet 4 Caelae the deaceght los sling fm the imposition ofthe ax? 1 Clelate the vale ofthe produce sul se the impostion of tx a Bt a 20, Econom forthe iB Diploms Paper 3 Workbook Clee the change inthe vale of consumer srl ftrthe tax has ben npn a 5 Refer tothe ign blow and anwer the ust thr fll 00300 —Fp——~ ‘uty ' plinth sion which ries if the government imposes rice Noor of oethe prada. Calc the change in consumer spending fellowing the imposition of the peice foo. a © Golesi he chang in producer even lowing he ipo ofthe pie Sor if the ovement ‘byall-hesrpla a 1 Suppose the govemment exports al the excess ply t $20 per unit. Caleulate the amount of tapaye ‘money ned to soppoc thi price contol heme a ramen ais Section | Micosconomice 24 1.4 Market failure Market failure “+The diagram blow shows the before ander situation flloving te npoion of an indies taxon cigs. 2 eof the cxgnalequium pce and quanti. e ae any guetn 1b Using the diagram, determine the aroun of x pi by sicker, a {© Determine the amount of tx revenus cole by the ovement a 4 Explain why the goverment might howe to tx the production andor consumpionofcigaretes. 2) 2 The diag below shows the mathe or adable permis in Country X, 1 With reference othe diagram, expan the nerd

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