Microeconomics

Table of Contents

1. Topic pack - Microeconomics - introduction
2. 1.1 Competitive Markets: Demand and Supply
3. 1.1 Competitive Markets: Demand and Supply - notes
4. 1.1 Competitive markets - questions
5. 1.1 Competitive markets - simulations and activities
   1. PlotIT - Build a demand curve
   2. Step by step - a decrease in demand
   3. Step by step - an increase in demand
   4. Step by step - a decrease in supply
   5. Step by step - an increase in supply
   6. PlotIT - Build a demand and supply diagram
   7. DragIT - Demand and supply
   8. Diagram toolkit
   9. Air travel (1)
   10. Air travel (2)
   11. Air travel (3)
   12. iPods (1)
   13. iPods (2)
   14. iPods (3)
6. 1.2 Elasticities
7. 1.2 Elasticities - notes
8. Section 1.2 Elasticities - questions
9. Section 1.2 Elasticities - simulations and activities
10. 1.3 Government intervention
11. 1.3 Government Intervention - notes
12. 1.3 Government intervention - questions
13. 1.3 Government intervention - simulations and activities
14. 1.4 Market failure
15. 1.4 Market failure - notes
16. Section 1.4 Market failure - questions
17. Section 1.4 Market failure - simulations and activities
18. 1.5 Theory of the firm
19. 1.5 Theory of the firm - notes (HL only)
20. Section 1.5 Theory of the firm - questions
21. Section 1.5 Theory of the firm - simulations and activities
22. Print View

PlotIT - Build a demand and supply diagram

The demand and supply schedules for organically grown wheat are shown in the following table. From it we can see that at a price of £200, farmers will produce (or plan to plant and produce) 220 tonnes per annum (p.a.); likewise consumers will buy 220 tonnes p.a. at this price. However, the price of non-organic wheat falls dramatically and is considerably cheaper than organic wheat. As a result the demand for organically grown wheat changes by 80 tonnes at all prices. Calculate the new level of demand at each price level. Jot this down on a piece of paper. You may like to check your answer.

In the diagram below plot the original supply and demand curves and the new demand curve given this change in the price of non-organic wheat.

You may like to check your answer to see if it matches the correct demand and supply curves.

1

Market for organic wheat What will be the shortage/surplus at the original price of £200 per tonne? a) A surplus of 80 tonnes b) A shortage of 80 tonnes c) A shortage of 50 tonnes d) A surplus of 50 tonnes Please select an answerYes, that's correct (i.e. 220 tonnes supplied minus 140 tonnes demanded).No, that's not right. 220 tonnes will be supplied and 140 tonnes will be demanded. This gives a surplus of 80 tonnes, not a shortage.No, that's not right. 220 tonnes will be supplied and 140 tonnes will be demanded. This gives a surplus of 80 tonnes.No, that's not right. 220 tonnes will be supplied and 140 tonnes will be demanded. This gives a surplus of 80 tonnes.

2	Equilibrium What will be the new equilibrium price and quantity? The new equilibrium price will be £150 per tonne and the quantity demand and supplied will be 180 tonnes p.a. (where the supply curve and the new demand curve intersect).