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IB Economics — Practice Questions flashcards

6 of 60 questions free to study here · 3 topics · the whole deck is built into Willys

Multiple-choice practice on the syllabus, one best answer each, on markets, elasticities, market failure, HL theory of the firm, AD–AS, macro policy, trade, exchange rates and development.

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Practice deck · part of IB Economics · written against: IB Diploma Programme IB Economics current subject guide; SL and HL in one deck, HL-only cards under subtopic tags starting HL. Updated 2026-10-10.

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  1. The price of coffee machines falls sharply. Ceteris paribus, what happens in the market for the coffee pods used in those machines?

    A) A movement along the demand curve raises the quantity of pods
    B) Demand shifts left, lowering the price and quantity of pods
    C) Supply shifts right, lowering the price and raising the quantity of pods
    D) Demand shifts right, raising the price and quantity of pods
    D) Demand shifts right, raising the price and quantity of pods

    Machines and pods are complements, so cheaper machines mean more machine owners and higher demand for pods at every price. A change in the price of a related good shifts the curve; it is not a movement along the pods' own demand curve.
    Microeconomics › Demand and Supply
  2. A new battery technology lowers the cost of producing e-bikes. At the same time, higher fuel prices make e-bikes more attractive to commuters. What can be predicted with certainty for the e-bike market?

    A) Equilibrium price and equilibrium quantity both rise
    B) Equilibrium price rises, but the change in quantity is uncertain
    C) Equilibrium price falls and equilibrium quantity is unchanged
    D) Equilibrium quantity rises, but the change in price is uncertain
    D) Equilibrium quantity rises, but the change in price is uncertain

    Supply shifts right (pushing price down) and demand shifts right (pushing price up), so both shifts raise quantity while their effects on price work against each other. Which price effect wins depends on the relative size of the shifts.
    Microeconomics › Demand and Supply
  3. A country's nominal GDP rises from 400 billion to 462 billion over a year, while the GDP deflator rises from 100 to 105. What is the growth rate of real GDP?

    A) 10.0%
    B) 5.0%
    C) 10.5%
    D) 15.5%
    A) 10.0%

    Real GDP in the second year is 4621.05=440\frac{462}{1.05} = 440 billion, and 440−400400=10%\frac{440 - 400}{400} = 10\%⁠. 15.5% is nominal growth, and 10.5% subtracts inflation from nominal growth, which is only an approximation.
    Macroeconomics › Measuring Economic Activity
  4. A country's GDP is 300 billion. Its residents earn 20 billion of income from abroad, and 50 billion of income is paid to foreign owners of factors of production in the country. What is its GNI?

    A) 230 billion
    B) 330 billion
    C) 370 billion
    D) 270 billion
    D) 270 billion

    GNI=GDP+20−50=270GNI = GDP + 20 - 50 = 270 billion. GNI adds income residents earn abroad and subtracts income sent to foreign owners, so it can fall below GDP when foreign-owned investment is large.
    Macroeconomics › Measuring Economic Activity
  5. Country X can produce more wheat and more cloth per worker than Country Y, but the opportunity cost of cloth differs between the two countries. Which statement is correct?

    A) X cannot gain from trade, since it has an absolute advantage in both
    B) Y should specialise in the good with its higher opportunity cost
    C) Both can gain if each specialises in its lower opportunity cost good
    D) Trade gains require each country to hold an absolute advantage
    C) Both can gain if each specialises in its lower opportunity cost good

    Gains from trade depend on comparative advantage: each country specialises where its opportunity cost is lower, even if one is more productive at everything. Absolute advantage alone does not decide the pattern of trade.
    The Global Economy › HL Trade and Exchange Rate Extensions
  6. A WTO member cuts its tariff on steel imported from one trading partner. Under the most-favoured-nation principle, what must it normally do?

    A) Seek approval from each member before any tariff change
    B) Give the same lower tariff to all other WTO members
    C) Raise its tariff on steel from countries outside the WTO
    D) Give the lower tariff only to developing-country members
    B) Give the same lower tariff to all other WTO members

    The most-favoured-nation principle requires the best tariff treatment given to one member to be extended to every member. Exceptions exist for free trade areas, customs unions and preferences for developing countries.
    The Global Economy › Benefits of Trade

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • OpenStax Principles of Economics 3e, consulted as a reference; no text copied.
  • Checked against UNDP Human Development Report technical notes (reference only; no text copied).
  • IB Diploma Programme Economics subject guide for first assessment 2024 (published February 2020, updated October 2022) (topic outline only; no text copied).
  • Remittance and WTO questions also checked against the IMF's Balance of Payments and International Investment Position Manual, sixth edition (BPM6), the World Bank's and Eurostat's definitions of remittances, and the WTO's Understanding the WTO; reference only, no text copied.

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