Skip to main content

Markets and prices - self-test questions

question

1
Market changes

The diagram below shows the market for 3G mobile phones. Which of the following events might have caused the shift in the demand curve?

ds_d_right

a)
b)
c)
d)
Please select an answerNo, that's not right. The economies of scale would reduce costs and therefore shift the supply curve to the right.Yes, that's correct. An increase in advertising may shift the demand curve to the right.No, that's not right. An increase in interest rates will reduce disposable income and therefore shift the demand curve to the left.No, that's not right. This will have the effect of shifting the supply curve to the right.
Check your answer

2
Market changes

The diagram below shows the market for coffee. Which of the following events might have caused the shift in the supply curve?
ds_s_right

a)
b)
c)
d)
Please select an answerNo, that's not right. This would increase the demand for coffee. No, that's not right. This would decrease the demand for coffee.No, that's not right. An increase in income would shift the demand curve to the right.Yes, that's correct. This would shift the supply curve for coffee to the right and encourage more production of coffee.
Check your answer

3
Market changes

The diagram below shows the market for olive oil. Which of the following events might have caused the shift in the supply curve?

ds_s_left

a)
b)
c)
d)
Please select an answerNo, that's not right. This would shift the supply curve for olive oil to the right as there would be further supply of olives available. No, that's not right. This would shift the demand curve not the supply curve.No, that's not right. An increase in income would shift the demand curve to the right.Yes, that's correct. This would shift the supply curve for olive oil to the left as Spain is a major producer of olives and with a drought the harvest will be much lower.
Check your answer

4
Market changes

The diagram below shows the market for hard disk music players. Which of the following events might have caused the shift in the demand curve?

ds_d_left

a)
b)
c)
d)
Please select an answerNo, that's not right. This would shift the supply curve for hard drive players to the right and not the demand curve. No, that's not right. This would shift the supply curve to the right as costs of production would be lower. The demand curve would not shift.No, that's not right. An increase in income would shift the demand curve to the right not to the left.Yes, that's correct. These new phones would be a substitute product and this would lead to a reduction in demand for hard drive players. This would shift the demand curve to the left.
Check your answer

5
Shifts in demand and supply curves

Consider the market for Mars Bars. Match the changes below with the shifts in supply and demand that they are likely to lead to.

a)
b)
c)
d)
Yes, that's correct. Well done. The supply curve will be affected by changes in costs and productivity, while the demand curve will be affected by health scares and changes in the price of substitutes.No, that's not quite right. Try again. The supply curve will be affected by changes in costs and productivity, while the demand curve will be affected by health scares and changes in the price of substitutes.Your answer has been saved.
Check your answer

6
Subsidy payments

Farmers are paid subsidies for the production of wheat. On a separate sheet of paper, draw a supply and demand diagram to show the impact of a subsidy and type an explanation of the diagram in the box below.

The impact of a subsidy is to shift the supply curve for the product to the right as shown in the diagram below. This is because the farmers become more willing to supply the good at each and every price. The supply curve shifts vertically downwards by the amount of the subsidy.

subsidy

Check your answer

7
Shifts in demand

Choose appropriate phrases from the drop down boxes below to complete the explanation of shifts of a demand curve and movements along demand curves.

When the price of a good changes there will a the demand curve. If the price increases, there will be a movement upwards and to the left on the demand curve and this is called a in demand or a in quantity demanded. If there is a decrease in price, then there will be a movement downwards to the right and this is called an in demand or an in quantity demanded. However, if one of the determinants other than price changes then the whole demand curve will shift, either to the right or to the left. For example, if income increases, then the demand curve will shift to the . If, however, the price of a substitute falls, then the demand curve will shift to the .

Your answer has been saved.Check your answer