IGCSE Demand & Supply

What is meant by the equilibrium quantity in the market for a product?

• the average quantity produced over the year

• the average quantity sold over the year

• the quantity at which profit occurs

• the quantity at which the demand and supply curves intersect

In a market there is a shortage of a good.

What change would cause the market to come to an equilibrium?

• a decrease in supply

• a fall in price

• an increase in demand

• a rise in price

What is not held constant in constructing a demand schedule?

• the incomes of consumers

• the prices of complementary goods

• the price of the good itself

• the tastes of consumers

A supply curve for a commodity is drawn to show how quantity supplied varies with

• government taxes

• income

• tastes

• the price of the commodity.

What would cause a movement down the demand curve for cars?

• a fall in the price of cars

• a fall in the price of petrol

• a rise in the price of car insurance

• a rise in the price of public transport

What is most likely to reduce the supply of factors of production in an economy?

• increasing the age of retirement

• introducing new methods of irrigation

• lowering the cost of borrowing from banks

• raising the rate of tax on profits

A government taxes the production of cars.

What is likely to decrease?

• the cost of supplying cars

• the price of cars

• the revenue for the government

• the supply of cars at every price

A government subsidises the production of pineapples.

This is likely to

• increase the price of pineapples.

• raise the costs of supplying pineapples.

• raise revenue for the government.

• cause the supply of pineapples to increase at every price.

The market for a normal good is in equilibrium at point X. Consumers’ incomes fall and the cost of producing the good rises.

In which area of the diagram will the new equilibrium be?

• A

• B

• C

• D

What is meant by an equilibrium price?

• a government price that ensures fairness for all

• a price that has no pressure to rise or fall

• a price that maximises the profits of the producers

• a price that maximises the satisfaction of the consumers