IB Economics Review 2022

What is short run?

• The short run is when at least one input is fixed while others are variable

• The short run is a concept that states that you will be able to change your plans

• The short run is when you can change capital and labour and any factor of production

Salary given to permanent staff is an example of which kind of cost

• fixed cost

• variable cost

Opportunity costs are

• the loss of potential gain from other alternatives when one alternative is chosen

• marginal costs when average costs are minimized

• what accountants consider as costs

• explicit costs

Types of cost in the curve are

• Total, variable and fixed

• Average and marginal

Marginal costs is

• the cost added by producing one additional unit

• the change in revenue added by producing one additional unit

• the additional cost

The MC curve cuts AC at its

• highest point

• minimum point

The shape of AFC is

• rectangular hyperbole

• S shaped

When inflation is high the _______________of the dollar decreases

• cost value
• purchasing power
• importance
• validity

If CPI goes from 100 to 300 and your salary goes from $100,000 to $200,000, what happened to your purchasing power?

• Increase
• Decrease
• No change

What is inflation?

• rise in all prices
• rise in most prices
• rise in some prices
• rise in general prices