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Paper 1 (1) Students

The document outlines a series of exam questions related to economic concepts such as price ceilings, price floors, elasticity of demand, and government intervention in markets. Each question is divided into two parts, requiring explanations and real-world examples to discuss the implications for stakeholders and the effectiveness of various economic policies. The total marks for each question are 25, and the document is intended for assessment purposes by the International Baccalaureate Organization.

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102 views3 pages

Paper 1 (1) Students

The document outlines a series of exam questions related to economic concepts such as price ceilings, price floors, elasticity of demand, and government intervention in markets. Each question is divided into two parts, requiring explanations and real-world examples to discuss the implications for stakeholders and the effectiveness of various economic policies. The total marks for each question are 25, and the document is intended for assessment purposes by the International Baccalaureate Organization.

Uploaded by

dieuthaotr695
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Paper 1 (1) [250 marks]

1. [Maximum mark: 25] SPM.1.SL.TZ0.1


(a) Explain two reasons why a government might set a price ceiling
(maximum price) on a good. [10]

(b) Using real-world examples, discuss the consequences of a price


ceiling on stakeholders. [15]

2. [Maximum mark: 25] 24M.1.SL.TZ1.1


(a) Explain how one determinant of demand might lead to a
decrease in the price of wheat and how one determinant of
supply might lead to an increase in the price of wheat. [10]

(b) Using real-world examples, evaluate the view that price floors
(minimum prices) should never be used. [15]

3. [Maximum mark: 25] 24M.1.SL.TZ2.1


(a) Explain how a decrease in the price of travelling by train might
affect the price and output of its substitutes and of its
complements. [10]

(b) Using real-world examples, evaluate the view that the


government should never provide subsidies to firms. [15]

4. [Maximum mark: 25] 23N.1.SL.TZ1.1


(a) Explain how the availability of substitutes for a good and
whether a good is a necessity affect its price elasticity of
demand. [10]
(b) Using real-world examples, examine the importance of price
elasticity of demand to firms and to governments. [15]

5. [Maximum mark: 25] 23N.1.SL.TZ2.1


(a) Explain the difference between price elasticity of demand and
income elasticity of demand. [10]

(b) Using real-world examples, evaluate the view that an


understanding of price elasticity of demand can be useful for
firms trying to increase total revenue. [15]

6. [Maximum mark: 25] 23N.1.HL.TZ1.1


(a) Explain two determinants of price elasticity of demand. [10]

(b) Using real-world examples, discuss how a government might


respond to a situation in which there is a high concentration
ratio in a market. [15]

7. [Maximum mark: 25] 23M.1.SL.TZ1.1


(a) Explain why, in the case of healthcare and education, positive
externalities might cause market failure. [10]

(b) Using real-world examples, discuss whether the provision of


subsidies is the best way to increase the consumption of merit
goods. [15]

8. [Maximum mark: 25] 23M.1.SL.TZ2.1


(a) Explain two types of government intervention that could be
used to correct the market failure arising from the consumption
of demerit goods. [10]

(b) Using real-world examples, discuss whether public goods


should always be provided directly by the government. [15]

9. [Maximum mark: 25] 23M.1.HL.TZ2.1


(a) Explain why products may have different income elasticities of
demand. [10]

(b) Using real-world examples, discuss the assumption that


consumers always seek to maximize their utility. [15]

10. [Maximum mark: 25] 22N.1.SL.TZ0.1


(a) Explain two forms of government intervention in markets. [10]

(b) Using real-world examples, discuss the view that governments


should intervene if markets fail to provide public goods. [15]

© International Baccalaureate Organization, 2025

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