IGCSE Past Paper MC question about demand & supply (2)

The diagram shows the demand for and the supply of air travel.

What could cause a shift of the demand curve from D1 to D2?

• an increase in airline costs

• an increase in airport taxes

• an increase in incomes

• an increase in worldwide terrorism

A government aims to boost production and increase sales of steel by subsidising private producers. A subsidy equal to W – Z per tonne is paid. According to the diagram, what would be the value of sales of steel after the subsidy?

• OP × OQ

• OP1 × OQ1

• WZ × OQ

• WZ × OQ1

The diagram shows the demand for chocolate.

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

• a change in tastes

• a fall in the price of chocolate

• an increase in income

• a successful advertising campaign for chocolate

People often eat biscuits when they drink a cup of tea. Between 2010 and 2015, the consumption of sweet biscuits decreased because of health warnings about high sugar consumption. Sales of tea, as a result, also fell. How would this be shown on demand and supply diagrams for biscuits and tea?

• biscuits: demand curve moves to left
  
  tea: demand curve moves to left

• biscuits: demand curve moves to right
  
  tea: demand curve moves to right

• biscuits: movement down along the demand curve
  
  tea: demand curve moves to right

• biscuits: movement up along the demand curve
  
  tea: demand curve moves to left

The diagram shows the demand curve D1 and supply curve S1 for healthcare in an economy. The original equilibrium is X. What will be the new equilibrium if the economy experiences sustained economic growth and the government reduces planning controls on the building of new hospitals?

• Point A

• Point B

• Point C

• Point D

The diagram shows the supply curve for a good.

What is the price elasticity of supply when the price rises from $2 to $4?

• 0.2

• 0.5

• 1

• 2

The table shows the price of, demand for and supply of X per week.

What will be effect if government imposes a minimum price of $40 per tonne?

• a fall in the price of X

• a shortage of X

• a surplus of X

• a waiting-list for X

The diagram shows the supply and demand curve for a good. The market equilibrium at point X

what is the excess demand at price P?

• PT

• QR

• QT

• ST

In a market there is a shortage of a good.

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

• an increase in demand

• a decrease in supply

• a fall in the price

• a rise in price

Changes in global weather conditions are increasing the risks of some of the islands of the Maldives disappearing under the sea. They are also affecting the country’s fishing industry which experiences frequent changes in equilibrium price. The country is considering whether to devote more of its resources to fishing. The country has recently created a new island, called Hulhumale, from reclaimed land.

(a) Why do choices have to be made about how resources are used?
(b) Explain why price tends to move towards equilibrium over time.

Answer explanation