Markets 1

The diagram shows the market for information technology (IT) graduates. The original equilibrium was X. Later, more IT students graduated from university and greater use of artificial intelligence (AI) increased the demand for IT staff. What is the new equilibrium?

• A

• B

• C

• D

What is an economist’s definition of a market?

• a collection of informal retail outlets run by small firms

• a place where traders gather regularly for short periods

• a system that enables individuals and firms to buy and sell goods

• the existence of consumer demand for a good

The diagram shows market demand and supply curves.

To what extent is the market in disequilibrium at price P₃?

• OQ₁ - OQ₂

• OQ₁ - OQ₃

• OQ₂ - OQ₄

• OQ₃ - OQ₅

The diagrams show the supply curve for an individual grower of tomatoes and for the total market supply of tomatoes. What explains the similarity of the two curves?

• As costs rise growers need to get a higher price to increase output.

• At the lower prices each grower supplies more tomatoes.

• The profitability per unit is the same for all growers irrespective of output.

• Supply is not always influenced by price.

A newspaper reported that 'The world market for coffee has returned to equilibrium'. Which situation supports this statement?

• A sequence of poor harvests resulted in shortages.

• Decreased transport costs led to a surplus of supply.

• Farmers matched demand by planting more coffee bushes.

• The price of coffee was fixed between producers.