IB Economics HL 2.1 Demand Question Bank
Evaluate demand changes using precise diagrams, assumptions and evidence to explain price, quantity and stakeholder effects.
- Syllabus
- First assessment 2022
- Course
- Economics HL
- Level
- HL
Exam points
- Analyse demand curves and movements using price, quantity demanded and ceteris paribus assumptions.
- Explain income and substitution effects and diminishing marginal utility behind the law of demand.
- Evaluate demand shifts from income, tastes, expectations, consumers, substitutes and complements.
Covered syllabus points
2.1 Demand question 1
Note that widgets and pidgets are imaginary products.
In the country of Burbia, the demand and supply of widgets are given by the functions
where Qd is the quantity demanded per month, Qs is the quantity supplied per month and P is the price per widget in dollars ($).
Question (a)
(a)
Using an example, outline why the assumption of ceteris paribus is necessary when analysing the effect of a change in price on the quantity demanded of a product.
[ 2 ]
Question (b)
(b)
Widgets and Pidgets have negative cross price elasticity of demand (XED).
Explain how the demand function for Widgets, Qd=249-4 P, is likely to change as a result of an increase in the price of Pidgets.
The demand for widgets is considered to be unit elastic at the current price.
[ 2 ]
2.1 Demand question 2
Explain why demand curves may not always slope downward from left to right.
2.1 Demand question 3
The demand for a product in a perfectly competitive market is given by the function
Q d=64-2 P
while market supply is given by the function
Q s=4 P-8
where P is the price per unit in dollars ($), Qd is the monthly quantity demanded and Qs is the monthly quantity supplied in thousands of units.
Using the functions, plot the following in the grid below:
a fully labelled market demand curve.
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