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WorksheetsEQUILIBRIUM AND DISEQUILIBRIUM
Total questions: 42
Worksheet time: 2hrs 4mins
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
9 Goods X and Y are complements.
What will be the effect on the equilibrium price and quantity of good X of an increase in the supply
of good Y?
A
B
C
D
12 The diagram shows a demand curve for journeys on a toll road.
If there is a reduction in the toll from $5 to $3, what is the resulting increase in the daily consumer
surplus?
A $1000
B $2000
C 3000
D 4000
8 In the diagram below D1 and S1 represent the demand and supply curves of a Malaysian industry in its home market. Equilibrium is at X.
The industry has to pay a large wage increase and at the same time faces increased competition from imported substitutes.
Which point, A, B, C, or D, on the diagram could represent the new equilibrium
A
B
C
D
13- The diagram shows the demand and supply curves for a product.
Which area measures the total amount consumers would be willing to pay for the equilibrium level of output?
A OWYZ B OXYZ C OVYZ D XYV
A
B
C
D
6- The diagram shows the demand curve for a product.
If the rectangle OLMN is equal in area to the rectangle OPQR, which statement is correct?
A Total revenue falls by MSQ if the price rises from OR to ON.
B Consumer surplus falls by RSMN if the price rises from OR to ON.
C The price elasticity of demand is unitary for all changes in price.
D A rise in price from OR to ON results in the same proportionate fall in quantity demanded.
A
B
C
D
12 In the diagram, point X shows the equilibrium price and quantity for a fruit drink.
The government announces that the ingredients used in the drink can be harmful.
Which point, A, B, C or D, is most likely to represent the new equilibrium after consumers hear this announcement?
A
B
C
D
13 - The table shows observations of a competitive market in equilibrium in two periods.
What could explain the change from period 1 to period 2?
A an increase in the price of a complement
B an increase in the price of a substitute
C the imposition of an indirect tax on suppliers
D the imposition of a minimum price of 60 cents by a government
A
B
C
D
10- In 2003 the outbreak in Asia of the SARS virus had a significant effect on the demand for travel to
holiday destinations in the region. The response of airlines was to reduce the number of flights to
Asian destinations.
The original market equilibrium was at point X.
Which point represents the new equilibrium in the market for travel to Asia?
A
B
C
D
11 The table shows demand and supply schedules for red peppers. The equilibrium price is initially
15 cents per kilogram (kg).
The government pays a subsidy of 10 cents per kg to producers.
What will be the new equilibrium price?
A 5 cents
B 10 cents
C 15 cents
D 20 cents
12 An eighteenth century clockmaker made a total of 12 identical clocks. There are currently just
three collectors of these clocks, X, Y and Z. The diagram shows their demand curves.
X, Y and Z initially own 4 clocks each. They come together to trade between themselves.
At the market clearing price (or equilibrium price), what is correct?
A
B
C
D
12)A The diagram shows demand and supply curves for petrol (gas). The initial equilibrium is at X.
What could be the new equilibrium if there were a large fall in the price of cars?
A
B
C
D
13 The diagram shows an individual’s demand curve for a commodity.
The supplier of the commodity charges a unit price of OP but consumers are currently required to
purchase a minimum quantity, OQ.
Which area(s) in the diagram measure the net gain in consumer surplus from the removal of the
minimum purchase requirement?
A x + y
B x – z
C y only
D z only
10 -The diagram shows the market for computer games. The market starts in equilibrium at X.
What will be the new equilibrium if the tax on computer games is increased?
A
B
C
D
11 The diagram shows the market for a luxury brand of smartphones. The initial equilibrium is at
point X.
What will be the new equilibrium following a rise in the price of batteries used by the
manufacturer of smartphones and a rise in consumer incomes?
WINTER 2016/ PAPER12
A
B
C
D
5) A rise in the price of a good is accompanied by an increase in the quantity demanded.
What could explain this?
WINTER 2016/ PAPER 12
A Consumers spend a high proportion of disposable income on the good.
B The price of a complementary good has also increased.
C The price of the good is taken to be an indication of the level of quality.
D The substitute goods are all very much more expensive.
17 The diagram shows the market for wheat.
If the government wishes to fix the price at OP2 what quantity of wheat must the government buy?
WINTER 2016/ PAPER 12
A OZ
B XY
C XZ
D YZ
14 The diagram shows the market supply and demand curves for wheat.
What should a government do to maintain a minimum price of OP2?
A buy quantity KL
B buy quantity KR
C sell quantity LR
D sell quantity KR
13 The diagram shows a consumer’s demand curve for a product.
How does consumer surplus change as the price of the product rises in $5 steps between $5 and $20?
A It falls at a constant rate (%) with each $5 rise
. B It falls by a constant amount with each $5 rise.
C It falls by a decreasing amount with each $5 rise
D It falls by an increasing amount with each $5 rise.
10 There is a reduction in world oil supplies due to war in some supplying countries at a time when the winter in some importing countries was much colder than usual. The diagram shows the original equilibrium price, P.
What will be the equilibrium price of oil in these circumstances?
A P1
B P2
C P3
D P4
6 D1 and S1 are the initial demand and supply curves for a normal product. They then change to D2
and S2.
Which pair of changes would result in the market equilibrium for the product changing from X1 to X2?
A a fall in the price of a raw material used in the manufacturing and a decrease in the price of a complementary good
B an increase in average consumer incomes and an increase in the level of an indirect tax imposed
C an increase in the price elasticity of demand for the product and a fall in its price elasticity of supply
D a rise in the population and an increase in the price of labour used in manufacturing
15 A market is in equilibrium at point X. The government then subsidises both consumers and producers by direct payments.
What will be the new equilibrium position?
A
B
C
D
10 In a free market in disequilibrium, which combination of price and quantity will lead to a fall in
price and a contraction in output to reach equilibrium?
A P1Q1
B P1Q3
C P3Q1
D P3Q3
8 The table shows the price of a good and total expenditure on the good during specific periods when the market is in equilibrium.
What can be deduced from this data?
.
A The good has constant opportunity cost
B The good is an inferior good.
C The price elasticity of demand is equal to one.
D The price elasticity of supply is equal to zero.
9 Prices of gold, silver and copper fell considerably in 2011 and again in 2015. The fall in 2011 was said to be because miners increased production. The fall in 2015 was because demand, especially from China, decreased.
Assuming that the equilibrium before 2011 was X, how would these movements in 2011 and subsequently in 2015 be shown on the demand and supply diagram?
A
B
C
D
10 Consumer X is the largest of five consumers and buys 50% of sales.
The table shows the quantity of the good demanded by consumer X and the market supply of the good.
What would be the market equilibrium price?
A $4
B $6
C $8
D $10
10 A market is in an unstable disequilibrium when it does not return to its equilibrium point from a disequilibrium position. The diagram shows a market with two equilibrium points.
At which price is the market in an unstable disequilibrium?
A
B
C
D
13 A market is in equilibrium at price $5. Market supply changes from being inelastic at each price tobecome elastic at each price. The market equilibrium price does not change. What is the effect on consumer surplus and producer surplus?
A
B
C
D
9 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?
A $7
B $8
C $9
D $10
11 In the diagram, S1 and D1 are the initial supply and demand curves for tea and X is the original
equilibrium. There is then a failure in the coffee harvest of a major coffee producer.
Which point would represent the equilibrium position in the tea market as a result of this failure?
A
B
C
D
5 The diagram shows the equilibrium price and quantity of good X.
The initial market equilibrium is shown by point E.
What might cause the market equilibrium to move to point F?
A a decrease in the costs of producing good X
B a decrease in the demand for good X
C an increase in the price of a substitute good
D the imposition of a specific sales tax on producers of good X
11 -Goods X and Y are complements.
What will be the effect on the equilibrium price and quantity of good X of an increase in the
supply of good Y?
A
B
C
D
12- The diagram represents a market for a good, in which the equilibrium price is OU.
A maximum price of OV is imposed by law.
What effect does this have on consumer surplus?
A It decreases by area VXYU.
B It increases by area WXV.
C It increases by area XYZ.
D It is not affected.
A
B
C
D
