Demand and Supply
209 questions· page 1 of 21
The price of a good rises by 5% and the quantity of it demanded rises by 3%. At the same time, the incomes of consumers of the good rise by 4%.
The law of demand appears not to be working in this case.
What is the most likely explanation?
Options
A Other things did not remain equal.
B The demand for the good was price inelastic.
C The real price of the good fell.
D The time period was the very short run.
The diagram shows the impact on equilibrium due to an increase in the costs of production. The original price is $72. The price elasticity of demand is -2.0.
What is the new equilibrium price, P2?
Options
A $81.00
B $84.00
C $92.00
D $108.00
What is likely to have a greater effect on an individual demand curve than on a market demand curve?
Options
A changing weather patterns
B government policy to promote consumption
C growth in population
D more expensive substitutes
A government may use a range of methods to intervene in a market to affect both demand and supply.
What is a method which will shift the demand curve for a good?
Options
A an indirect tax
B a subsidy
C direct provision
D provision of information
The diagram shows the demand for and supply of a product.
What could cause supply to shift from S1 to S2?
Options
A a fall in the price of the product
B a fall in labour costs
C a rise in the price of the product
D a rise in labour costs
D1 and S1 are the initial demand and supply curves in the market for new cars with an equilibrium at X.
What will cause the demand curve to shift to D2 and the supply curve to shift to S2?
Options
A a decrease in real incomes and a rise in the costs of new car production
B a decrease in the price of petrol and a subsidy on new car production
C an increase in the availability of loans for new car purchases and a specific tax on new cars
D an increase in the price of train travel and an increase in the number of car producers
The diagram shows the market demand for and supply of foodstuffs for an economy.
This economy has faced a decrease in the supply of foodstuffs and, at the same time, an increase in demand for foodstuffs by consumers.
Which point represents the market equilibrium following these changes?
Options
A point A on Fig. 8.1
B point B on Fig. 8.1
C point C on Fig. 8.1
D point D on Fig. 8.1
Along which axis can the market demand curve be aggregated from individual demand curves?
Options
A both the horizontal and the vertical axis
B the horizontal axis only
C the horizontal or the vertical axis but not both
D the vertical axis only
In the diagram, D1 is the initial demand curve for student places at universities.
What could cause the demand curve to shift to D2?
Options
A a decrease in student fees for universities
B a decrease in the level of youth unemployment
C an increase in graduate earnings compared with non-graduate earnings
D higher A Level grades demanded for university entrance
The diagram shows a market supply curve (S).
What is measured on the X-axis and the Y-axis?
Options
| X-axis | Y-axis | |
|---|---|---|
| A | quantity | income |
| B | quantity | price |
| C | price | income |
| D | income | quantity |