WorksheetsOCR Economics - Part 1 - Supply and Demand
Total questions: 28
Worksheet time: 14mins
What is market demand?
Adding together all individual demand
Adding together direct and indirect demand
Changes in prices at each quantity
Consumers’ willingness and ability to buy
A flower seller increases her prices by 10% and finds that it has no effect on the amount that she sells.
This suggests that demand for the flowers is
Perfectly price elastic
Perfectly price inelastic
Price inelastic
Unitary price elastic
What usually leads to a rightward shift in the demand curve?
An increase in consumers’ incomes
A technological improvement which reduces the costs of production
The government introduces a tax on the product
The supply curve shifts to the right
The demand for apples is the amount of them that consumers are willing and able to buy at a given
Cost
Income
Price
Supply
Which of the following refers to the role of the consumer
Acts as the end-user of a good or service
Acts to protect buyers of goods and services
Can decide what goods and services to supply
Can introduce regulations about goods and services
What is meant by unlimited wants?
Goods which do not have an opportunity cost
Resources which are essential for survival
The ability to buy whatever is required
The infinite desire for goods and services
Which diagram shows a supply curve with a unitary elasticity of supply?
W
X
Y
Z
What does enterprise require the individual to organize?
Factors of production to minimize the opportunity cost
Market for the factors of production
Production and to bear the risks of the project
Risk involved in borrowing the necessary finance
The market supply curve for goods and services normally slopes upwards. Which of the following best explains the reason for this?
Average costs of production fall as output increases
Higher prices attract new firms to the market
Opportunity costs of not producing rise as output increases
Production costs fall as output increases so profits rise
Excess demand is corrected in a market by changes in
Price
Quantity
Resource allocation
Taxes
How is demand defined?
The desire to purchase a good or service over time
The relationship between the quantity of a good or service sold and consumer incomes
The relationship between the total revenue a firm receives and the price
The willingness and ability to purchase a good or service
Which of the following is the most likely effect of an increase in advertising on the market for breakfast cereals?
The market demand curve shifts to the left
The market demand curve shifts to the right
The market supply curve shifts to the left
The market supply curve shifts to the right
A market system allocates scarce resources through
government taxes and subsidies
prices and incentives
the allocation of state benefit payments
the control of wages
Which of the following is an incorrect statement about consumers?
Goods and services are bought for personal use
They compare the satisfaction of consumption against the price when making a purchase
They decide what goods and services will be produced
They have little power in the market
Which of the following is a factor of production?
A credit card
A household’s washing machine
A one pound coin
A piece of spare land
What does supply mean?
The amount producers are willing and able to provide to the market at a given level of consumer income
Price
Quantity demanded
Request by the government
Which of the following will occur if there is a large increase in the demand for housing?
A leftward shift in the demand curve for builders
A leftward shift in the supply curve of builders
A rightward shift in the demand curve for builders
A rightward shift in the supply curve of builders
An upward sloping supply curve is a straight line starting at the origin. This supply curve is
Price elastic
Price elastic to begin with but becomes price inelastic at higher levels of output
Price inelastic
Unitary price elastic
Which statement about the diagram of the market for rented accommodation is correct?
A price of r is above the market price of rented accommodation
As the price of rented accommodation increases supply will increase
If r is the current price of rented accommodation some people will not be able to rent any accommodation
The supply of rented accommodation is price elastic
What will lead to a leftward shift in the supply curve?
A fall in demand for the good
A fall in the price of the good
A subsidy paid to producers
A tax placed on the production of the good
Which of the following is not a scarce resource?
Air
Buildings
Labour
Machinery
Which area in the diagram represents the total amount paid by consumers when the price is A?
AEB
OABC
OABD
OEBC
The price elasticity of demand for a good is unitary. What will happen if prices rise?
Expenditure on the good will fall
Expenditure on the good will rise
The quantity demanded will fall
The quantity demanded will rise
Which of the following lists contains only factors of production?
Capital, government, money and suppliers
Land, labour, capital and enterprise
Land, labour, capital and money
Machinery, buildings, output and profits
All production decisions have an opportunity cost. This means that when something is produced
an identical alternative is given up
the least valuable alternative is given up
the next best alternative is given up
there is no other alternative
A market starts in equilibrium and then demand falls. Which of the following is most likely to happen?
A higher equilibrium price and equilibrium quantity
A higher equilibrium price and lower equilibrium quantity
A lower equilibrium price and equilibrium quantity
A lower equilibrium price and higher equilibrium quantity
Factors of production are combined to produce
consumer wants
opportunity costs
output
resources
The table shows the relationship between the price of a good and the quantity demanded. Which of the following statements is correct?
It shows that less is demanded when incomes rise
It shows that price and quantity demanded are inversely related
It shows that price elasticity of demand is equal to 1
It shows that the equilibrium price must be £20
