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Question Bank - Economics

Markets: Demand and supply

Q1. Which of the following would you expect to shift the supply curve for household paints?

(Select one or more answers)

(a) * An increase in housing market activity
(b) * An increased rate of economic growth
(c) * An increase in the oil price (oil being a raw material for many household paints)
(d) * Increased labour costs



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Q2. In the diagram below (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S1 and D1. Click on the new equilibrium if there is an increase in cocoa prices.

(Click on the image to select your answer)



*
(a) (b) (c) (d) (e) (f) (g) (h) (i)



Source: Bized

Q3. In the diagram below (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S1 and D1. Click on the new equilibrium if there is rapid economic growth and the government also impose a tax on mars bars.

(Click on the image to select your answer)



*
(a) (b) (c) (d) (e) (f) (g) (h) (i)



Source: Bized

Q4. In the diagram below (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S1 and D1. Click on the new equilibrium if there is a health scare about the effect mars bars may have.

(Click on the image to select your answer)



*
(a) (b) (c) (d) (e) (f) (g) (h) (i)



Source: Bized

Q5. In the diagram below (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S1 and D1. Click on the new equilibrium if there is an increase in productivity and at the same time a decrease in the price of snickers bars.

(Click on the image to select your answer)



*
(a) (b) (c) (d) (e) (f) (g) (h) (i)



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Q6. Which of the following would you expect to shift the demand curve for cars?

(Select one or more answers)

(a) * A fall in the rate of economic growth
(b) * An increase in the cost of steel
(c) * A decrease in public transport prices
(d) * A subsidy given to car producers



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Q7. In the table below, if the government set a minimum price of £6 and agreed to buy any resulting surplus to stockpile it, how much would they have to spend in the first year? (Type just the number without a £ sign or any commas)

Table 1


(Type your answer)

*



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Q8. Fill in the gaps in the paragraph below to give an explanation of the effects of taxes and subsidies on the market equilibrium. (There is a bonus mark if you get all the words right)


(Type your answer)




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Q9. In the diagram below (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S1 and D1. Assuming that mars bars are an inferior good, click on the new equilibrium if there is a recession and wages of workers producing them fall.

(Click on the image to select your answer)



*
(a) (b) (c) (d) (e) (f) (g) (h) (i)



Source: Bized

Q10. In the table below what will be the equilibrium market price?

Table 1


(Select one answer)

(a) * £2
(b) * £3
(c) * £4
(d) * £5

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Q11. An increase (rightward shift) in the demand for a good will tend to cause

(Select one answer)

(a) * an increase in the equilibrium price and quantity
(b) * none of these answers
(c) * an increase in the equilibrium price and a decrease in the equilibrium quantity
(d) * a decrease in the equilibrium price and an increase in the equilibrium quantity
(e) * a decrease in the equilibrium price and quantity

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Q12. Which of the following shifts the demand for watches to the right?

(Select one answer)

(a) * an increase in the price of watches
(b) * none of these answers
(c) * a decrease in the price of watch batteries if watch batteries and watches are complements
(d) * a decrease in consumer incomes if watches are a normal good
(e) * a decrease in the price of watches

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Q13. In the table below what would be the new equilibrium price if the government imposed a tax of £2 per unit on this good?

Table 1


(Select one answer)

(a) * £4
(b) * £5
(c) * £6
(d) * £7

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Q14. In the table below what would be the new equilibrium price if the government gave firms a subsidy of £2 per unit on this good?

Table 1


(Select one answer)

(a) * £5
(b) * £4
(c) * £3
(d) * £2

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Q15. All of the following are determinants of supply except:

(Select one answer)

(a) * Price
(b) * Income levels
(c) * Objectives of the firm
(d) * Level of technology

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Q16. All of the following are determinants of demand except:

(Select one answer)

(a) * Price
(b) * Tastes
(c) * Supply
(d) * Price of other goods

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Q17. If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is

(Select one answer)

(a) * a normal good
(b) * an inferior good
(c) * a substitute good
(d) * a complementary good

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Q18. The law of demand states that an increase in the price of a good

(Select one answer)

(a) * increases the supply of that good
(b) * decreases the quantity demanded for that good
(c) * decreases the demand for that good
(d) * increases the quantity supplied of that good
(e) * none of these answers

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Q19. If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are

(Select one answer)

(a) * complements
(b) * inferior goods
(c) * normal goods
(d) * none of these answers
(e) * substitutes

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Click to view your total score for all the above questions that you have attempted.

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