,
, 3
Do not write
outside the
0 3 Figure 1 shows the market demand for electric cars. box
Figure 1
The shift of the market demand curve from D1 to D2 would most likely be caused by
[1 mark]
A a fall in the price of electric cars.
B a government subsidy to producers of electric cars.
C a marketing campaign promoting electric cars.
D a reduction in the price of petrol and diesel fuels.
0 4 A firm hopes to increase its market share by setting its prices lower than most of its
competitors.
What is the most likely reason for this strategy?
[1 mark]
A The firm has a licence that gives it a temporary monopoly
B The firm is a price taker in a very competitive market
C The firm is aiming to differentiate its products from its competitors
D The firm is aiming to increase its long-run profits
Turn over ►
*03*
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, 4
Do not write
outside the
0 5 A firm allows customers to personalise a mug with a name of their choice, which it sells for box
£15. The firm pays £3 for each mug. The paint and labour cost an extra £7. The firm has
fixed costs of £150 per month and in a typical month, it produces and sells 60 mugs.
What is the average cost of producing one personalised mug?
[1 mark]
A £2.50
B £5
C £10
D £12.50
0 6 One reason why merit goods, such as education and health care, can lead to market
failure is that
[1 mark]
A individuals are unwilling to pay for merit goods.
B individuals have incomplete information about merit goods.
C merit goods are generally provided free by the government.
D merit goods are subject to the free-rider problem.
*04*
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, 3
Do not write
outside the
0 3 Figure 1 shows the market demand for electric cars. box
Figure 1
The shift of the market demand curve from D1 to D2 would most likely be caused by
[1 mark]
A a fall in the price of electric cars.
B a government subsidy to producers of electric cars.
C a marketing campaign promoting electric cars.
D a reduction in the price of petrol and diesel fuels.
0 4 A firm hopes to increase its market share by setting its prices lower than most of its
competitors.
What is the most likely reason for this strategy?
[1 mark]
A The firm has a licence that gives it a temporary monopoly
B The firm is a price taker in a very competitive market
C The firm is aiming to differentiate its products from its competitors
D The firm is aiming to increase its long-run profits
Turn over ►
*03*
lock in and max out: tyrionpapers.com for more tyrionpapers.com
IB/M/Jun25/71351/1
, 4
Do not write
outside the
0 5 A firm allows customers to personalise a mug with a name of their choice, which it sells for box
£15. The firm pays £3 for each mug. The paint and labour cost an extra £7. The firm has
fixed costs of £150 per month and in a typical month, it produces and sells 60 mugs.
What is the average cost of producing one personalised mug?
[1 mark]
A £2.50
B £5
C £10
D £12.50
0 6 One reason why merit goods, such as education and health care, can lead to market
failure is that
[1 mark]
A individuals are unwilling to pay for merit goods.
B individuals have incomplete information about merit goods.
C merit goods are generally provided free by the government.
D merit goods are subject to the free-rider problem.
*04*
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