Loading subjects
18 exam-style questions with model answers, plus 21 quick multi-choice questions — every question on the site for this standard, grouped by the 6 pages of notes they come from.
Write a full answer before you reveal the model one — that comparison is where the marks come from. Every block links back to the notes that teach it.
Explain the law of diminishing marginal utility and state what happens to total utility while marginal utility is falling but still positive.
Using a marginal utility model, explain in detail why the demand curve slopes downwards.
A café owner is deciding whether to introduce a loyalty card that gives every sixth coffee free.
Using marginal utility data and a model, justify the implications of diminishing marginal utility for this producer's pricing decision.
A price rise from $10 to $12 causes quantity demanded to fall from 500 to 425 units.
Calculate the price elasticity of demand and state whether demand is elastic or inelastic.
A local bakery calculates the PED for its bread as 0.4.
Explain in detail what this means, why demand is likely to be this inelastic, and what it implies for the bakery's total revenue if it raises the price.
A government is considering a new excise tax and can place it either on a good with PED = 0.2 or on a good with PED = 2.4.
Using elasticity data and a model, justify the implications of price elasticity of demand for the government's decision.
State the law of diminishing returns and explain what happens to total product while marginal product is falling but still positive.
Using a diminishing returns model, explain in detail why the supply curve slopes upwards.
A small manufacturer with one production line is deciding how many staff to employ on a shift.
Using production data and a model, justify the implications of diminishing returns for this producer's staffing decision.
A 20% rise in price causes quantity supplied to rise by 5%.
Calculate the price elasticity of supply, state whether supply is elastic or inelastic, and give one reason supply might be this responsive.
Explain in detail why the price elasticity of supply of apples is very low immediately after harvest but much higher over a period of several years.
A regional council is concerned about rapidly rising house prices after a surge in demand for housing in its area.
Using elasticity of supply data and a model, justify the implications of price elasticity of supply for the council's policy response.
State the characteristics of monopolistic competition and give a New Zealand example.
Using the kinked demand curve model, explain in detail why prices in an oligopoly tend to be sticky.
A person is deciding whether to open a new café in a suburb that already has fifteen of them.
Using evidence about market structure and a model, justify the implications of monopolistic competition for this producer's decision.
Explain the roles of prices and profits in allocating resources in a market economy.
Consumer demand for a food product increases sharply.
Explain in detail how prices and profits reallocate resources into that industry, and what happens to the price in the long run.
A government is considering whether to intervene in a market where prices have risen sharply.
Using evidence and a model, justify the implications of the role of prices and profits in resource allocation for the government's decision.