Unit 2: Microeconomics
Topic 2.7: Role of Government in Microeconomics Questions
Practice 20 exam-style questions for IB Economics Topic 2.7. Review the question stems below, then unlock the full Question Bank to access markschemes, model answers, and AI grading.
3State3 marks
2026
State one objective of introducing a minimum wage.
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Explain one opportunity cost of providing subsidies.
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A city has capped the rent landlords may charge.
Define the term **price ceiling**.
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A text reports that Halden has fixed a legal limit on the price of bread.
Define the term price ceiling.
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Calculate the welfare loss caused by the subsidy.
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Define a price ceiling (maximum price).
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Unlock Question10Identify1 mark
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Identify the size of the per-unit subsidy.
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The government has fixed a maximum price for bread.
Define the term **price ceiling**.
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The government has set a legal limit on the price of rice.
Define the term **maximum price**.
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State two reasons why a government might impose an indirect tax.
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State one possible objective of introducing a price ceiling on rent.
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Identify the subsidy per unit shown on the diagram.
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State two reasons why a government might provide a subsidy.
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The government guarantees wheat farmers a minimum price.
Define the term **price floor**.
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2026
Define a price floor (minimum price).
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