Here is a varied list of many knowledge recall questions to aid your microeconomics revision. your teacher may refer to this type of activity as retrieval practice.
- Why is economics regarded as a social science?
- Explain the term ceteris paribus and give an example.
- Explain the difference between a positive and normative statement
- Write your own positive statement about the labour market.
- Write your own normative statement about the labour market.
- What is the basic economic problem?
- How does the PPF curve highlight the basic economic problem?
- Draw a PPF showing the opportunity costs between capital goods and consumer goods.
- Explain the term Pareto-efficiency. Annotate your diagram from the previous question if necessary.
- What is the difference between renewable and non-renewable resources?
- What are the four functions of money?
- What is specialisation?
- Who wrote 'The Wealth of Nations' in the 18th century?
- What is the division of labour?
- Explain the 'pin factory'
- Why is money important for specialisation and the division of labour?
- Explain the differences between free, mixed and command economies.
- What is the aim for a rational consumer?
- What is the aim for a rational firm?
- Define demand.
- Why does the demand curve slope downwards?
- What is diminishing marginal utility?
- Explain two factors that may cause a shift right in the demand for avocados.
- Define supply.
- Why does the supply curve slope upwards?
- Explain two factors that may cause a shift right in the supply for avocados.
- Write down the formula for price elasticity of demand.
- Write down the formula for price elasticity of supply.
- Write down the formula for cross price elasticity of demand.
- Write down the formula for income elasticity of demand.
- Explain two factors that cause the demand for tobacco to be price inelastic.
- Explain two factors that cause the supply for low skilled labour to be price elastic.
- What is a normal good?
- What is an inferior good?
- What is a substitute good?
- What is a complementary good?
- What are the three functions of the price mechanism?
- Define the consumer surplus.
- Define the producer surplus.
- Draw a diagram to show an indirect tax being levied on the market for alcohol.
- Draw a diagram to show a subsidy being applied to the market for wheat.
- Explain three ways that a consumer may act irrationally.
- Define market failure.
- Draw any two externality diagrams
- Explain the relationship between private costs, external costs and social costs.
- Explain the relationship between private benefits, external benefits and social benefits.
- Why does the state often provide public goods?
- What is a public good?
- What is a quasi public good?
- Explain a market that may have high information failure. Use the example of lemons in the used car market if you struggle.
- Explain the difference between an advalorem tax and a specific tax.
- Draw a diagram to show a minimum price e.g. minimum alcohol unit price in Scotland.
- Draw a diagram to show a maximum price.
- Explain how trade pollution permits can be used to internalise externalities and reduce pollution.
- Explain government failure.
- Profit maximising (MC=MR) is the default business objective, list and explain at least tow other objectives.
- Explain the difference between internal and external economies of scale.
- Draw a LRATC diagram to show the minimum efficient scale.
- Explain three internal economies of scale.
- What is the difference between normal and supernormal profits?
- Draw a diagram to show normal and supernormal profits.
- Explain allocative efficiency.
- Explain productive efficiency.
- Explain dynamic efficiency.
- Explain X-Inefficiency.
- What are the four main characteristics of perfect competition and how can these be seen in the market for tomatoes?
- Why do firms in perfect competition only make normal profits in the long run?
- What are the main three characteristics of monopolistic competition?
- What are the three key characteristics of oligopoly markets?
- Why is collusion likely in oligopoly markets?
- Draw a simple game theory model to show collusion between two chicken shops to set a high price.
- What are the key characteristics of a monopoly market?
- Explain third degree price discrimination in the market for cinema tickets. Draw a diagram to illustrate.
- What are the positives that arise from monopoly firms?
- What is a natural monopoly?
- Why does the army have monopsony power in demanding soldier labour?
- What are contestable markets?
- What are sunk costs?
- In terms of demand for labour what does MRP stand for?
- Explain two factors that may increase the supply of labour in the UK.
- Explain one factor that may cause there to be an increase in the supply of doctors in the UK.
- Explain occupational immobility of labour.
- Explain geographical immobility of labour.
- Draw a diagram to show the national minimum wage.
- What is the difference between unemployment and underemployment?
- Compare the elasticty of demand for labour for nurses and checkout workers.
- Compare the elasticity of supply from doctors and fruit pickers.
- What is the CMA?
- Why might the CMA block a proposed merger?
