What this practice covers
These questions are drawn from past IB Economics papers and filtered to role of government in microeconomics. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on role of government in microeconomics, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Drawing a maximum price above equilibrium (or a minimum below it) and then claiming a shortage or surplus.
- Assuming whoever pays the tax to the government bears its burden.
- Saying the consumer price rises by the full amount of the tax.
- Forgetting that an indirect tax shifts supply, not demand.
- Shifting supply by an arbitrary distance rather than by the tax or subsidy per unit.
- Drawing an ad valorem tax as a parallel shift, it pivots.
- Forgetting that a subsidy also creates a welfare loss unless it is correcting an externality.
- Assuming removing price as a rationing device removes the need to ration.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Role of Government in Microeconomics revision notes.