Demand and Supply

What is measured on the vertical axis of a demand curve?

• Cost

• Price

• Supply

• Quantity

What happens to people’s willingness and ability to buy a product when its price falls?

• A

• B

• C

• D

The diagram shows the demand for chocolate.

What could cause the movement from point X to point Y?

• A change in tastes

• An increase in income

• A fall in the price of chocolate

• A successful advertising campaign for chocolate

What is meant by a contraction in demand?

• A rise in demand due to a fall in the price of a complement

• A reduction in demand due to a rise in the price of the product

• A rise in demand due to a rise in the price of a substitute product

• A reduction in demand due to a fall in the income of the population

Which of these is showing that a product is the substitute of the other product?

• 
• 
• 
• 

The price of fuel rises. What will happen to the demand for cars?

• It will extend

• It will contract

• It will decrease

• It will increase

Which event would cause the demand curve for air travel to shift to the left?

• A fall in the cost of air fuel

• A fall in the safety of sea travel

• A rise in the size of the population

• A rise in the price of foreign holidays

The diagram shows the demand curve for coffee in the US.

Why did the quantity demanded move from Q1 to Q2?

• Incomes rose in the US

• Coffee became cheaper

• The price of substitutes for coffee rose

• There was a successful advertising campaign by coffee retailers

What is the relationship between demand and price and the relationship between supply and price?

• A

• B

• C

• D

How would an increase in supply be illustrated?

• A movement up the supply curve

• A movement down the supply curve

• A shift to the left of the supply curve

• A shift to the right of the supply curve