EQUILIBRIUM AND DISEQUILIBRIUM

5) The market demand for a product is made up of the demand from three firms, X, Y and Z.

The table shows the demand from each firm and the market supply.

What is the equilibrium price in the market?

SUMMER 2014/PAPER 11

• A $7

• B $8

• C $9

• D $10

12 The table shows a competitive market in equilibrium in two periods.

What could explain the change from period 1 to period 2?

summer 2014/ paper 11

• A an increase in the price of a complement

• B an increase in the price of a substitute

• C the imposition of a minimum price of 60 cents by a government

• D the imposition of an indirect tax on suppliers

13 A country experiences a very wet and cold summer.

How might this affect the price of umbrellas and the price of ice creams?

summer 2014/ paper 11

• A

• B

• C

• D

5 The demand curve in the diagram shows the relationship between the number of car journeys

and the cost of a car journey.

What would cause the demand curve to shift to the left?

SUMMER 2014/ PAPER 12

• A a reduction in car tax

• B a reduction in petrol prices

• C a reduction in public transport prices

• D the introduction of tolls on motorways

6) The diagram shows the market for milk. Two conditions change. The cost of cattle feed rises

sharply and this is followed by the government raising the tax on cheese which uses milk in its

production.

Which changes in position on the diagram of demand curves for milk are consistent with these

events?

summer 2014/ paper 12

• A from W to X, followed by X to Z

• B from W to Z, followed by Z to X

• C from X to Z, followed by Z to Y

• D from Z to X, followed by X to Y

8 The table shows a consumer’s expenditure on a range of goods at different levels of income.

For which good does the consumer have an income elasticity of demand greater than zero, but

less than one?

SUMMER 2014/ PAPER 12

• A

• B

• C

• C

11 Demand and supply in a competitive market both decrease by 10% at all prices.

What will be the effect on the equilibrium price and quantity sold?

summer 2014/ paper 13

• A

• B

• C

• D

13 Between 2006 and 2007, the price of skimmed milk powder on the world market rose from $1000

per tonne to $2400 per tonne.

Assuming that the market is a free market, what will result from the price change?

summer 2014/ paper 13

• A Consumers will buy more complements to skimmed milk powder.

• B Farmers will increase the size of their dairy herds to supply more milk.

• C Firms processing milk into skimmed milk will switch to producing substitutes.

• D Governments will introduce a system of rationing.

10 In a market there is a surplus of a good.

Which change would cause the market to come to an equilibrium?

SUMMER 2015/ PAPER 11

• A a decrease in demand

• B a fall in price

• C a government minimum price

• D an increase in supply

11 The market for sugar is in equilibrium. A disease affects the sugar crop and newspapers report

harmful health effects of consuming sugar.

Which combination of changes in demand and supply matches these events?

summer 2015/ paper 11

• A

• B

• C

• D