(5.) Economics Hl. Paper 2, Techniques.

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By IBLindman
I
IBLindman
Community Contributor
Quizzes Created: 20 | Total Attempts: 15,906
Questions: 10 | Attempts: 141

SettingsSettingsSettings
Economics Quizzes & Trivia

The economics paper two is one that students have come to fear more as they have the idea that it is harder than the first. To help you be calmer and get rid of the pre exam jitters making their way to you, we have prepared the quiz below. Give it a try.


Questions and Answers
  • 1. 

    You have 60 minutes to write your paper 2. How do you use your time?

    • A.

      You select three questions and give them 20 minutes each

    • B.

      You select one question and answer it very thoroughly

    • C.

      You select two questions and spend 40 minutes on one and 20 minutes on the other one

    Correct Answer
    A. You select three questions and give them 20 minutes each
    Explanation
    The correct answer suggests that the best way to use the 60 minutes is by selecting three questions and allocating 20 minutes to each question. This approach allows for equal time distribution among the questions, ensuring that each question receives sufficient attention and effort. By dividing the time equally, you can demonstrate your knowledge and understanding of multiple topics, rather than focusing solely on one question.

    Rate this question:

  • 2. 

    Consider this question: "Explain what is meant by a production possibility curve and use a production possibility curve diagram to explain the concepts of scarcity, choice and opportunity cost" If you draw a perfect production possibility curve and explain it well, but do not explain the concepts of scarcity, choice and opportunity cost, how many points do you get?

    • A.

      2/10

    • B.

      3/10

    • C.

      4/10

    • D.

      5/10

    Correct Answer
    B. 3/10
    Explanation
    Let's just say, always try and answer the full question.

    Rate this question:

  • 3. 

    Consider the same question: "Explain what is meant by a production possibility curve and use a production possibility curve diagram to explain the concepts of scarcity, choice and opportunity cost" When illustrating "choice", which point on the diagram should be used?

    • A.

      A point outside the curve

    • B.

      A point inside the curve

    • C.

      A point along the curve

    • D.

      A point outside the diagram

    Correct Answer
    C. A point along the curve
    Explanation
    If you choose a point inside the curve you are not only illustrating that there is a choice of producing more of the manufacturing good and less of the agricultural good (or vice versa), but also the potential of producing more of both goods simultaneously. That would be to complicate the illustration, thus choose a point along the curve

    Rate this question:

  • 4. 

    Consider the same question: "Explain what is meant by a production possibility curve and use a production possibility curve diagram to explain the concepts of scarcity, choice and opportunity cost" Does making a choice to move from a point inside the PPF curve to the actual curve involve opportunity costs?

    • A.

      Yes

    • B.

      No

    • C.

      Yo

    Correct Answer
    B. No
    Explanation
    Moving from a point inside the production possibility curve (PPF) to the actual curve does not involve opportunity costs. The PPF represents the maximum combination of goods or services that can be produced given the available resources and technology. Points inside the curve indicate that resources are not fully utilized, meaning there is potential for more production without sacrificing other goods. Therefore, moving from a point inside the curve to the actual curve does not require giving up any alternative goods, and thus, there is no opportunity cost involved.

    Rate this question:

  • 5. 

    Consider this question: "A concert is held in a stadium with limited seating capacity. The organizers set the ticket prices at a level below the equilibrium price. Using a diagram, explain the possible consequences of their decision." What would earn full marks?

    • A.

      Accurate diagram and explanation of equilibrium price

    • B.

      Accurate diagram and explanation of equilibrium price + detailed discussion of one consequence

    • C.

      Accurate diagram and explanation of equilibrium price + detailed discussion of two consequences

    • D.

      Accurate diagram and explanation of equilibrium price + less detailed discussion of two consequences

    Correct Answer
    C. Accurate diagram and explanation of equilibrium price + detailed discussion of two consequences
    Explanation
    To earn full marks, the answer should include an accurate diagram and explanation of the equilibrium price. Additionally, it should provide a detailed discussion of two consequences that may result from the organizers setting ticket prices below the equilibrium price. This demonstrates a thorough understanding of the topic and the ability to analyze the situation from multiple perspectives.

    Rate this question:

  • 6. 

    Consider this question: "A government decides to raise personal income tax rates. Using diagrams, explain one possible demand-side consequence and one possible supply-side consequence of this decision" For this question, the definitions alone account for 3/10 marks. Which definitions?

    • A.

      Income tax, demand-side consequence and supply-side consequence

    • B.

      Income tax, aggregate demand and aggregate supply

    • C.

      Income tax

    Correct Answer
    B. Income tax, aggregate demand and aggregate supply
    Explanation
    Remember that "demand-side consequence" and "supply-side consequence" is just a way of saying "change in aggregate demand" and "change in aggregate supply".

    Rate this question:

  • 7. 

    Consider this question: "Explain why a depreciation of a country's exchange rate may not always lead to an improvement in its current account of the balance of payments" There are many keywords in this question: depreciation, exchange rate, current account (of balance of payments). How many points have you secured if you define them all to start with?

    • A.

      2 points

    • B.

      3 points

    • C.

      4 points

    Correct Answer
    B. 3 points
    Explanation
    A depreciation of a country's exchange rate may not always lead to an improvement in its current account of the balance of payments because it can have various effects on the economy. While a depreciation can make a country's exports cheaper and more competitive, it can also make imports more expensive, leading to a higher import bill. Additionally, a depreciation can also increase the cost of servicing foreign debt, which can negatively impact the current account. Therefore, the relationship between exchange rate depreciation and the current account is complex and depends on various factors such as the elasticity of demand for exports and imports, the composition of a country's exports and imports, and the level of foreign debt.

    Rate this question:

  • 8. 

    Consider the same question: "Explain why a depreciation of a country's exchange rate may not always lead to an improvement in its current account of the balance of payments" This question suggests that there is a condition for the improvement of the current account to take place after the depreciation. The condition is known as the "Marshall-[...] condition"

    Correct Answer
    Lerner
  • 9. 

    Consider the same question: "Explain why a depreciation of a country's exchange rate may not always lead to an improvement in its current account of the balance of payments" Given that the Marshall-Lerner condition is satisfied, the improvement will still not be immediate due to the fact that it takes time to change. Write down the letter that signifies this time-effect.

    Correct Answer
    J
    Explanation
    (J-curve effect)

    Rate this question:

  • 10. 

    Assume you forget to mention both the J-curve effect and the Marshall-Lerner condition and fluff about other stuff, how many marks can you earn?

    • A.

      6 marks

    • B.

      7 marks

    • C.

      8 marks

    Correct Answer
    A. 6 marks
    Explanation
    If you forget to mention both the J-curve effect and the Marshall-Lerner condition and fluff about other stuff, you can earn 6 marks. This implies that even though you may have provided some incorrect or irrelevant information, you can still receive partial credit for the remaining aspects of the question.

    Rate this question:

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 16, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 30, 2011
    Quiz Created by
    IBLindman
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.