Theme 1 - Markets - Equilibrium
Quiz by Mark Seccombe
EdExcel (A-Level)
Economics
English National Curriculum
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18 questions
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- Q1Which one of the following would shift the supply curve for a good to the left? A decrease in...in demand for the goodthe elasticity of supply of the goodsubsidies granted to producersthe rate of growth of labour productivity45s1.2.4
- Q2Which one of the following diagrams, A, B, C or D, shows that there is ‘excess capacity on the motorway’?ABCD45s1.2.7
- Q3The demand curve will shift to the left ifthe price of the good increasesthere is a successful advertising campaign for the goodthe price of complementary goods increasesthe tax on the good increases45s1.2.2
- Q4The change in price from P1 to P2 and output from Q1 to Q2 could have been caused byeconomies of scalethe shift of the demand curvemonopoly replacing competition in the marketthe government subsidizing the production of a merit good45s1.2.4
- Q5The rightward shift of the supply curve from S1 to S2 could be caused byan increase in the demand for the goodthe creation of a monopoly by the firms in the industry supplying the gooda reduction in the rate of Value Added Tax (VAT) applied to the gooda decrease in the cost of the raw materials used in the production of a substitute good45s1.2.4
- Q6A market is defined as being in equilibrium whenthere is maximum output at minimum costprices are at their lowest possible levelconsumer satisfaction is maximizedthere is no tendency for the market price to change45s1.2.6
- Q7The abolition of betting tax led to an estimated 37% increase in sales during the last quarter at Stanley's, a chain of betting shops. Betting tax was an indirect tax on each bet placed by customers. The abolition of betting tax can be shown by thesupply curve of bets shifting to the leftdemand curve for bets shifting to the rightdemand curve for bets shifting to the leftsupply curve of bets shifting to the right45s1.2.4
- Q8The diagram shows the demand for, and supply of, rail services. The shift of the curve from D1 to D2 is most likely to result froma government decision to increase subsidies for rail travela planned expansion of the government's railway-track building programmea reduction in the tax imposed on the price of a litre of petrola decision by the government to impose a tax on workplace car-parking45s1.2.2
- Q9The diagram below illustrates the market for a good which has been the subject of government intervention. As a result, the market equilibrium has moved from point E to point F. Which one of the following is most likely to be true?a public good which is in short supply and has been rationed by the governmenta demerit good which has been taxedan agricultural good subject to a maximum price of OP2an essential good which has been subsidized45s1.4.1a
- Q10The increase in price of milk from P1 to P2 is most likely to be a result ofa successful advertising campaign for a milk substitute and a tax on milka decrease in wages paid to all workers, including farm workersa decrease in the population and an increase in the subsidy on milkan increase in milk production costs and a decrease in the price of complementary goods to milk45s1.2.6
- Q11The price of cocoa more than doubled over an 18-month period as a result of increased buying on world markets. Such a development in the cocoa market could be shown on a supply and demand diagram bya movement along the demand curve to the lefta shift of the demand curve to the lefta movement along the demand curve to the righta shift of the demand curve to the right45s1.2.2
- Q12The shift of the supply curve from S1 to S2 is most likely to have resulted froma fall in the price of frozen fishan increased preference for fresh fish by the consumeran increase in the wages of fishermenimproved technology in the fishing industry45s1.2.4
- Q13All other things being equal, the upward slope of the supply curve is due tothe elasticity of supply exceeding the elasticity of demandhigher prices providing an incentive for firms to increase their productive efficiencyhigher prices providing a profit incentive for firms to expand productionthe existence of a monopoly in the industry45s1.2.4
- Q14In a typical demand schedule, quantity demandedvaries inversely with priceis determined by the elasticity of demandvaries directly with pricevaries proportionately with price45s1.2.2
- Q15Which of the following would cause a shift to the right of demand for a normal good?a decrease in the price of a close substituteconsumers’ expectations that the price of the good is about to fallan increase in the price of a complementary goodan increase in the income of buyers45s1.2.2
