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Economics
May 2019
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Economics
Standard level
Paper 1
1 hour 30 minutes
Instructions to candidates
yyDo not open this examination paper until instructed to do so.
yyYou are not permitted access to any calculator for this paper.
yySection A: answer one question.
yySection B: answer one question.
yyUse fully labelled diagrams and references to examples where appropriate.
yyThe maximum mark for this examination paper is [50 marks].
2219 – 5111
3 pages © International Baccalaureate Organization 2019
–2– M19/3/ECONO/SP1/ENG/TZ1/XX
Section A
Microeconomics
1. (a) Explain the concepts of consumer surplus and producer surplus. [10]
(b) Examine the view that the best allocation of resources, from society’s point of view,
occurs where the marginal private beneit equals the marginal private cost. [15]
2. (a) Explain why a government might decide to impose a price ceiling on goods and
services such as essential foods or rented housing. [10]
(b) Evaluate the view that the most efective way in which the government can encourage
the consumption of merit goods is through direct provision. [15]
–3– M19/3/ECONO/SP1/ENG/TZ1/XX
Section B
Macroeconomics
3. (a) Explain how aggregate demand in an economy might be afected by a rise in the
exchange rate and a decrease in the income of major trading partners. [10]
(b) To what extent is expansionary iscal policy the best policy to achieve a reduction in the
rate of unemployment? [15]
4. (a) Explain the role of improved productivity in achieving economic growth. [10]
(b) Discuss the view that economic growth can only be achieved at the expense of other
macroeconomic objectives such as a low and stable rate of inlation and equity in the
distribution of income. [15]