NEW
Font size
WorksheetsWHALES 30 on 30: Markets Bumper Edition
Total questions: 50
Worksheet time: 49mins
The market for tractors is supplied by two firms, X and Y, each initially having 50% of the market. A 10 % increase in the price of tractors leads to an increase in output from firm X of 10 % and from firm Y of 20%. What is the price elasticity of supply of tractors in this market?
A 1
B 1.5
C 2
D 3
A
B
C
D
What is most likely to make the demand for Good X inelastic?
A Good X is a luxury good.
B Good X is habit-forming.
C The proportion of income spent on Good X is very high.
D There are a large number of substitutes for Good X
A
B
C
D
What could not cause a shift in an individual’s demand curve for Good Z?
A a change in the price of Z
B a change in the individual's income
C a change in the individual's tastes
D a change in advertising expenditure on Z
A
B
C
D
Good X is a substitute for Good Y and a complement to Good Z. What would be the effect of a fall in the price of Good X?
A Only the demand for X will rise.
B Demand for X, Y and Z will rise.
C Demand for Y will fall and for Z will rise.
D Demand for Y will rise and for Z will fal
A
B
C
D
The market demand equation for a good is given by Qd = 310 - 20 p and the supply equation by Qs = 10 + 10 p, where p denotes the price of the good. What is the equilibrium price?
A 5
B 10
C 15
D 20
A
B
C
D
What is necessary for consumer surplus to be zero?
A Demand is perfectly inelastic.
B Demand is perfectly elastic.
C Supply is perfectly inelastic.
D Supply is perfectly elastic.
A
B
C
D
The price of Good X rises by 20%. As a result, the demand for a substitute Good Y rises by 10%. What is the cross-elasticity of demand for Good Y with respect to Good X?
A + 2
B + 0.5
C - 0.5
D - 2
A
B
C
D
Which of the following will not cause a shift in the market supply curve of a commodity?
A a rise in the price of the commodity
B a rise in the price of a factor input
C a change in technology
D the introduction of a specific tax on the commodity
A
B
C
D
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
A
B
C
D
The diagram shows the demand curve for commodity X. Which of the following statements is correct?
A Demand is less elastic at higher prices than at lower prices.
B Consumer expenditure on the commodity always rises when price falls.
C Price elasticity of demand is different at every price.
D Price elasticity of demand equals one at every price.
A
B
C
D
Over the last ten years the price elasticity of demand for tea in many countries has risen. What is the most likely cause of this change in price elasticity?
A a decrease in the incomes of consumers
B a decrease in the number of complements to tea
C an increase in the number of substitutes for tea
D an increase in the supply of tea
A
B
C
D
The workers in a factory currently earn $240 for a 40-hour week. The management offers them a choice between either a 10 per cent wage increase or an increase in the weekly wage to $260 along with a reduction from 40 to 39 hours. Disregarding the value of leisure time, what is the opportunity cost to each worker of opting for the 39-hour week?
A $4
B $6
C $20
D $24
A
B
C
D
The diagrams show changes in the market for a good. Which diagrams represent ‘a change in the quantity demanded’?
A 1 and 2
B 1 and 3
C 1 only
D 3 only
A
B
C
D
A refinery which processes oil into petrol (gas) is faced with the following conditions.
1 It is working at full capacity.
2 Its petrol storage tanks are full.
3 It has received delivery of a new fleet of petrol tankers to transport its petrol.
4 It requires six months to train new workers to qualify in safety procedures.
Which of the conditions will tend to make the supply of petrol relatively price inelastic?
A 1 and 2
B 1 and 4
C 2 and 3
D 3 and 4
A
B
C
D
The table gives estimates of the price elasticities and cross elasticities of demand for bus and rail travel. What would be the change in the volume of rail travel resulting from a 1% increase in bus fares?
A an increase of 0.16%
B an increase of 0.43%
C a reduction of 0.13%
D a reduction of 0.37%
A
B
C
D
What is consistent with an individual demand curve that slopes down from left to right?
A As price falls, a person switches away from rival products towards the product.
B As price falls, a person’s willingness and ability to buy the product will decline.
C As price rises, a person becomes less sensitive to price changes.
D As price rises, a person’s opportunity cost of purchasing the product falls.
A
B
C
D
The diagrams show possible demand curves for four commodities. Which diagram shows a completely inelastic demand curve?
A
B
C
D
Which statement could explain a decrease in the demand for natural rubber?
A Demand for car tyres has increased.
B New techniques of producing substitutes for rubber have been introduced.
C Productivity of rubber plantations has increased.
D The area of land on which rubber is grown has increased.
A
B
C
D
8 The table illustrates the demand and supply for rice in a market in Africa. When the price rises from $20 to $30 per kg, what is the approximate price elasticity of demand for rice?
A 0.25
B 0.5
C 1.0
D 2.0
A
B
C
D
A farmer pays a landowner for the use of a field. What is the income to the landowner called?
A interest
B profit
C rent
D wages
A
B
C
D
What is the definition of a normal good?
A one where the demand for the good is both price and income elastic
B one where the income elasticity of demand for the good is greater than zero
C one where the proportion of income a consumer spends on the good increases with a rise in income
D one where the quantity demanded increases when the price of the good falls
A
B
C
D
The table gives the short-run supply schedules of three firms X, Y and Z, which comprise an industry
A
B
C
D
The demand for a good falls at the same time as its costs of production decrease. What will be the combined effect of these changes on the price and on the quantity supplied of the good?
A
B
C
D
The diagrams show a change in demand from D1 to D2 and a change in supply from S1 to S2 for four different goods. Which diagram illustrates the good for which additional new uses have been found and which receives an increase in government subsidy?
A
B
C
D
The diagram shows the demand and supply curves for parking spaces in a hospital car park. The managers decide to rely on the price mechanism to allocate parking spaces at the hospital. What is required for this to work?
A Alternative means of transport must be provided for those unable to afford price OP.
B A survey will be needed to find out the amount users are willing to pay.
C The capacity of the car park will need to be expanded.
D The price charged for parking spaces must be OP.
A
B
C
D
What will happen to an industry’s supply curve if new firms enter the industry?
A It will shift to the left at any given price.
B It will shift to the right at any given price.
C There will be a downward movement along the supply curve.
D There will be an upward movement along the supply curve.
A
B
C
D
What does not cause the demand curve for a good to shift its position?
A advertising expenditure
B consumer tastes
C the price of substitute goods
D the price of the good
A
B
C
D
When will the demand curve for motorcycles shift to the left?
A when the price of cars falls
B when the price of motorcycles falls
C when the tax on motorcycles rises
D when the price of public transport rises
A
B
C
D
The diagram shows the market for coffee. The initial equilibrium position is X. The price of tea, a substitute, falls and an indirect tax is imposed on coffee. What will be the new equilibrium position?
A
B
C
D
The operations are provided free to the consumer. Which statement is correct?
A Consumer surplus from the operations is ODD1.
B The equilibrium price is P.
C The equilibrium price is indeterminate, because the supply curve is vertical.
D The equilibrium price is zero.
A
B
C
D
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
A
B
C
D
In the diagram, D1 is the initial demand curve for student places at universities. What could cause the demand curve to shift to D2?
A a decrease in student fees for universities
B a decrease in the level of youth unemployment
C an increase in graduate earnings compared with non-graduate earnings
D higher A Level grades demanded for university entrance
A
B
C
D
In 2010, poor harvests reduced fruit crops, and furniture producers gave big discounts on furniture products. How might these changes have affected the position of the supply curve for the products?
A
B
C
D
The table shows 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 a minimum price of 60 cents by a government
D the imposition of an indirect tax on suppliers
A
B
C
D
A country experiences a very wet and cold summer. How might this affect the price of umbrellas and the price of ice creams?
A
B
C
D
What might shift an individual’s demand curve for petrol to the right?
A a fall in the price of cars
B a fall in the price of public transport
C a rise in the price of parking
D a rise in the price of petrol
A
B
C
D
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
A
B
C
D
The diagram shows a consumer’s short-run and long-run demand curves for coconuts. Initially, the consumer purchases quantity Q at price P. If the price of coconuts increases from P, the consumer’s short-run response is greater than his long-run response. If the price decreases from P his short-run response is smaller than his longrun response. What is the consumer’s short-run demand curve?
A VYW
B VYZ
C XYW
D XYZ
A
B
C
D
What is a market demand curve?
A the demand for all of a country’s products
B the total sum of individual demand curves for a product
C the output of all the firms in an industry
D the stocks of a particular good available for sale
A
B
C
D
The diagram shows the outcome when a landowner, who has allowed motorists to park on his field at no cost, introduces a parking charge of $1. What is the loss of consumer surplus that results?
A X only
B X + Y
C Y only
D Y + Z
A
B
C
D
Two goods, X and Y, have a cross elasticity of demand of +1.8. Good Y has an income elasticity of demand of –0.6.
An increase in both the incomes of consumers and the price of good Y will have which combination of effects?
A
B
C
D
What is price elasticity of supply?
A the change in the quantity supplied when a price changes
B the change in the quantity supplied when demand changes
C the comparison of the proportionate change in supply to the proportionate change in demand
D the comparison of the proportionate change in supply to the proportionate change in price
A
B
C
D
In which situation is the demand for a product said to be price elastic?
A A fall in price increases expenditure on the product.
B A fall in price increases quantity demanded.
C A rise in price increases expenditure on the product.
D A rise in price reduces quantity demanded.
A
B
C
D
A theatre increases the price of its tickets from $10 to $15. As a result, its total receipts decrease from $10 000 to $6000. Within what range does the price elasticity of demand for theatre tickets lie?
A 0.2 to 0.5
B 0.6 to 1.0
C 1.1 to 1.4
D 1.5 to 2.0
A
B
C
D
The table shows Shanaz’s and Sunil’s price elasticity of demand for restaurant meals and theatre tickets. There is a rise in the price of restaurant meals and a fall in the price of theatre tickets. What can be concluded after these price changes?
A Restaurant owners will receive more income.
B Shanaz will spend more money on both theatre tickets and restaurant meals.
C Sunil will spend more money on both theatre tickets and restaurant meals.
D Theatre owners will receive less income.
A
B
C
D
The diagram shows the demand curve for a normal product. Which two points indicates a move from a price inelastic point to a less inelastic point?
A W to X
B X to W
C Y to Z
D Z to Y
A
B
C
D
For which supply curve is the value of price elasticity of supply not the same at all points on the curve?
A S1
B S2
C S3
D S4
A
B
C
D
Producer surplus is the difference between
A the consumer surplus from the good and the producers’ total cost of supplying the good.
B the highest price that the consumer would be willing to pay for the good and the price the producer actually sold it for.
C the lowest price that the producer would accept for the good and the price the producer actually sold it for.
D the quantity that the producers manufacture in a week and the amount sold to consumers in that week.
A
B
C
D
What is cross elasticity of demand?
A the responsiveness of price of good X due to a change in demand of good Y
B the responsiveness of quantity demanded of a good due to a change in its price
C the responsiveness of quantity demanded of good X due to a change in quantity of good Y
D the responsiveness of quantity demanded of good X due to a change in the price of good Y
A
B
C
D
Consumers receive an increase in their incomes. Which circumstances will cause the quantity of the product sold to increase the most?
A
B
C
D
