Demand & Supply Exercise

Which feature is a characteristic of a market economy

• government planning plays a key role in the economy

• producers respond automatically to changes in consumer demand

• resources are allocated by government

• there is always full employment

What is a mixed economy?

• one in which both capital and consumer goods are produced

• one in which both necessities and luxuries are produced

• one in which there is both an agricultural and a a manufacturing sector

• one in which there is both a private and a public sector

A country changes from a planned to a market economy. What effect will this have?

• a decrease in government officials

• a decrease in the role of the price mechanism

• an increase in state ownership of resources

• an increase in the output of public goods

which event would cause an increase in demand for petrol?

• an increase in concern for the environment

• an increase in the tax on diesel

• a decrease in disposable income

• a decrease in population size

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

• a fall in the safety of sea travel

• a fall in the cost of air fuel

• a rise in the price of foreign holidays

• a rise in the size of the population

which pair of products is an example of joint supply?

• beef and leather

• bread and butter

• cars and petrol

• computers and printers

what is meant by equilibrium price?

• the lowest possible price for a product

• the most profitable price for a product

• the price which equates the demand for and supply of a product

• the price which equates the number of buyers and sellers of a product

What will cause the demand curve for a good to shift to the right?

• a decrease in the disposable income of consumers

• a decrease in the price of a complement good

• a decrease in the price of a substitute good

• a decrease in the price of the good

A supply curve shows the link between the quantity supplied and

• demand.

• equilibrium output.

• the price of the product.

• the scale of production.