16 October IB Economics Review Paper 1 exam

16 October – IB Economics • • • Review Paper 1 exam questions and command terms Small mistake on p. 47 Examine XED and YED Play “The Snickers Effect” to review market demand elasticities - Portfolio check on 24 October (Unit 1 reading notes, class notes and dictionary) - Practice exam question on 24 October What does the value of XED mean?

Practice Exam Question – 24 October • • Paper 1 question Both questions are on PED (Syllabus #18 -19) Command term for (a) – Explain Command term for (b) – Examine Have 1 hour (normally 45 minutes) Please bring lined paper May prepare a note card

DEED – Paper 1, Part A Questions • D - define all the key terms in the question • E - explain the key concepts (this is the main part of a 10 -mark question) • E – give examples • D - always include diagrams Based on: http: //www. ibsurvival. com/topic/19067 answering-p 1 -question-10 -15 -marks/

DEADER for Evaluation-style Questions (from Mr. Barratt) D - Define E - Examples (diagrams and explanations) A - Advantages D - Disadvantages E - Evaluate (e. g. time, stakeholders, pros/cons, gender) • R - Recommendation (clear decision) • • • (often for 15 -mark questions and part D of data response)

Cross Price Elasticity of Demand (XED) Syllabus Items 20 -21 • Show that substitute goods have a positive value of XED and complementary goods have a negative value of XED. • Explain that the (absolute) value of XED depends on the closeness of the relationship between two goods. • Examine the implications of XED for businesses if prices of substitutes or complements change.

Cross-price elasticities of demand • Air-conditioning units and kilowatts of electricity = -0. 34 • Coke and Pepsi = +0. 63 • High-fuel-consuming sport-utility vehicles (SUVs) and gasoline = -0. 28 • Mc. Donald’s burgers and Burger King burgers = +0. 82 • Butter and margarine = +1. 54 How would a 5% increase in the price of Pepsi affect the quantity of Coke demanded? http: //faculty. pepperdine. edu/jburke 2/ba 210/Power. P 1/Set 6 Answers. pdf

XED Graphs (on IWB)

How can a number line show the closeness of the relationship between two goods?

Cross-Price Elasticity of Demand Worksheet

YED - Syllabus Item 22 • Outline the concept of income elasticity of demand, understanding that it involves responsiveness of demand (and hence a shifting demand curve) to a change in income.

Income elasticity of demand (YED) Measures how much the demand for a product changes in response to a consumer’s income YED = ?

What are examples of each of these? • • Normal Goods – Positive elasticity Necessity Goods – Low elasticity Superior Goods – High elasticity Inferior Goods – Negative elasticity

The Snickers Effect

Syllabus http: //ibeconomics-isd. weebly. com/