2.4 Critique of the maximizing behaviour of consumers and producers (HL only) - IB Questionbank | RevisionDojo

2.1 Demand

2.2 Supply

2.3 Competitive Market Equilibrium

2.4 Critique of the maximizing behaviour of consumers and producers (HL only)

2.5 Elasticities of demand

2.6 Elasticity of supply

2.7 Role of government in microeconomics

2.8 Market failure - externalities, common pool resources, public goods, asymmetric information

2.9 Market failure - public goods

2.10 Market Failure - asymmetric information (HL only)

2.11 Market failure - market power (HL only)

2.12 The market’s inability to achieve equity (HL only)

2.4 Critique of the maximizing behaviour of consumers and producers (HL only) Questionbank

Practice 2.4 Critique of the maximizing behaviour of consumers and producers (HL only) with authentic IB Economics exam questions for both SL and HL students. This question bank mirrors Paper 1, 2, 3 structure, covering key topics like microeconomics, macroeconomics, and international trade. Get instant solutions, detailed explanations, and build exam confidence with questions in the style of IB examiners.

Paper

Level

Question 1

HLPaper 1

Explain how choice architecture can be used to influence market equilibrium.

[10]

Question 2

HLPaper 1

Explain why firms may have alternative business objectives than profit maximisation.

[10]

Question 3

HLPaper 1

Explain why the demand curve is downward sloping.

[10]

Using real-world examples, evaluate choice architecture as a method of reducing the consumption of demerit goods.

[15]

Question 4

SL & HLPaper 1

Explain the relationship between an individual consumer’s demand and market demand.

[10]

Using real-world examples, evaluate the view that the assumptions behind rational consumer choice have very few limitations.

[15]

Question 5

HLPaper 1

Explain why the demand for basic raw materials might be price inelastic.

[10]

Using real-world examples, discuss the significance of price elasticity of demand (PED) for a government imposing an indirect tax on a product.

[15]

Question 6

HLPaper 3

A country’s government is considering a subsidy program to promote renewable energy production. Use the following information to answer the questions:

The government plans to allocate $500 million in subsidies. The price elasticity of supply for renewable energy is 1.50.

Calculate the percentage increase in renewable energy output if the subsidy results in a 20% reduction in production costs.

[2]

Using real-world examples, discuss how this subsidy could impact market efficiency and equity in the long term.

[10]

Question 7

HLPaper 1

Explain why companies in monopolistic competition are not allocatively efficient.

[10]

Using real-world examples, evaluate whether it is more beneficial for consumer a market for a market to be dominated by a single firm or shared by many small firms operating under monopolistic competition.

[15]

Question 8

SLPaper 1

Explain the impact of a price floor in a farming market on consumers, producers, and the government.

[10]

Using real-world examples, evaluate the effectiveness of a price ceiling as a policy to protect low-income consumers.

[15]

Question 9

HLPaper 1

Explain how consumer income influences the demand of a product.

[10]

Using real-world examples, evaluate the view that governments should consider PED when placing indirect taxes on demerit goods.

[15]

Question 10

HLPaper 1

Explain the assumptions underlying the law of supply.

[10]

Using real-world examples, evaluate the view that all firms have profit maximisation as their main objective.

[15]

Paper

Level

Question 1

HLPaper 1

Explain how choice architecture can be used to influence market equilibrium.

[10]

Question 2

HLPaper 1

Explain why firms may have alternative business objectives than profit maximisation.

[10]

Question 3

HLPaper 1

Explain why the demand curve is downward sloping.

[10]

Using real-world examples, evaluate choice architecture as a method of reducing the consumption of demerit goods.

[15]

Question 4

SL & HLPaper 1

Explain the relationship between an individual consumer’s demand and market demand.

[10]

Using real-world examples, evaluate the view that the assumptions behind rational consumer choice have very few limitations.

[15]

Question 5

HLPaper 1

Explain why the demand for basic raw materials might be price inelastic.

[10]

Using real-world examples, discuss the significance of price elasticity of demand (PED) for a government imposing an indirect tax on a product.

[15]

Question 6

HLPaper 3

A country’s government is considering a subsidy program to promote renewable energy production. Use the following information to answer the questions:

The government plans to allocate $500 million in subsidies. The price elasticity of supply for renewable energy is 1.50.

Calculate the percentage increase in renewable energy output if the subsidy results in a 20% reduction in production costs.

[2]

Using real-world examples, discuss how this subsidy could impact market efficiency and equity in the long term.

[10]

Question 7

HLPaper 1

Explain why companies in monopolistic competition are not allocatively efficient.

[10]

[15]

Question 8

SLPaper 1

Explain the impact of a price floor in a farming market on consumers, producers, and the government.

[10]

Using real-world examples, evaluate the effectiveness of a price ceiling as a policy to protect low-income consumers.

[15]

Question 9

HLPaper 1

Explain how consumer income influences the demand of a product.

[10]

Using real-world examples, evaluate the view that governments should consider PED when placing indirect taxes on demerit goods.

[15]

Question 10

HLPaper 1

Explain the assumptions underlying the law of supply.

[10]

Using real-world examples, evaluate the view that all firms have profit maximisation as their main objective.

[15]