Causes of changes in supply and demand

Section A- Multiple Choice Questions

When the monetary value of gas rises by 25 % , the measure purchased falls by 10 % . This means that the demand for gas is ( a ) . Inelastic to monetary value alterations

( B ) . Absolutely inelastic to monetary value alterations

( degree Celsius ) . Elastic to monetary value alterations

( vitamin D ) . Absolutely elastic to monetary value alterations

The demand for a good is inelastic if:

( a ) . when the monetary value rises, quantity demand rises

( B ) when the monetary value rises, entire gross falls

( degree Celsius ) When the monetary value rises, entire gross rises

( vitamin D ) when the monetary value rises measure demanded falls.

Ceteris paribus, a lessening in the demand for furniture will take to:

Increased monetary value and reduced measure supplied

Decreased monetary value and reduced measure supplied

Decreased monetary value and no alteration in measure supplied

Increased monetary value and no alteration in measure supplied

If the Petroleum Cartel ( OPEC ) is expected to cut production of petroleum, what will go of the market equilibrium for petroleum?

Monetary values will fall, measures will increased

Monetary values will increased, measures will increased

Monetary values and measures will stay the same

Monetary values will increase, measures will diminish

During Easter, many consumers buy fish alternatively of poulet. This means that the demand for fish:

Becomes elastic

Remainss unchanged

Shifts to the left

Shifts to the right

The monetary value snap of demand measures the reactivity of measure demanded for good Ten to:

Measure demanded for good Yttrium

A alteration in the monetary value of good Ten

Quantity supplied

A alteration in the end product of good Ten

Which of the followers will do an enlargement in the supply of poulet?

A autumn in the monetary value of beef

A rise in the monetary value of poulet

A rise in vegetarianism

A rise in the monetary value of poulet provender

Which of the following would do a displacement of the supply curve for Mangifera indicas to the left?

A rise in the monetary value of apples

A successful advertisement run for pick

A decrease in the EU subsidies to fruit agriculturists

An addition in the entire Numberss of consumers of Mangifera indicas

The demand curve for a normal good displacements to the left when:

The monetary value of the good itself rises

The monetary value of complements rises

The monetary value of replacements rises

An indirect revenue enhancement is imposed on the good

Which of the followers is non held changeless when a demand curve is drawn?

The monetary value of the good itself

Households ‘ existent income

The monetary value of viing goods

The monetary value of complementary goods

Section B

Given the supply and demand map:

QD = 100 – 20p

QS = 10 + 40p

Price ( P )

Measure Demanded ( QD )

Measure Supplied ( QS )

$ .50

$ 1.00

$ 1.50

$ 2.00

$ 2.50

Use the information in the above tabular array to:

Calculate the equilibrium monetary value. ( 3 Markss )

Calculate the equilibrium measure demanded and measure supplied and show the information diagrammatically. ( 6 Markss )

With the assistance of a diagram, explain the difference between a displacement in the supply and a motion along the supply curve. ( 6 Markss )

Explain four ( 4 ) factors that cause the demand curve to switch for a coral phone. ( 6 Markss )

Shift in Supply vs. Movement along the Supply Curve.

If one of the determiner of monetary value alterations it causes the supply curve to switch but if none of the determiners other than monetary value alterations causes a motion along the supply curve.

These other determiners are:

Cost of production

Profitableness of related merchandises

Profitableness of goods in joint supply

Nature and other unpredictable events

Expectations future monetary value alterations.

The difference between a motion along the supply curve and a displacement of the supply curve is normally distinguished between a alteration in supply and a alteration in measure supplied.

If the other determiners of supply causes supply to lift the supply curve will switch to the right. The new curve ( S1 ) shows that each monetary value more Oxford pencils will be supplied.

If the other determiners cause supply to fall, the supply curve will switch to the left. The new curve ( S2 ) shows that at each monetary value less Oxford pencils will be supplied.

Factors that Cause the demand Curve to switch for a coral phone.

Four ( 4 ) factors that cause the demand curve to switch for a coral phone are:

Income available to the family

Income is the payment or the amount of all the rewards, wages, net incomes, involvement payments, rents received and all other signifiers of gaining in a given period of clip.

Monetary values of other goods and services available.

The monetary value of one good can impact the monetary value of others. These are goods that replacement or complement one another. The replacement goods are used as a replacing for others. When the monetary value of one good additions, the demand for the other good goes up.

The complementary goods are the goods that accompany each other or ‘go together ‘ such as Eggs and bacon, akee and saltfish. When the monetary value of one good additions, the demand for the other goes down and frailty versa.

The families gustatory sensation and penchants.

The gustatory sensations and penchant of the family can act upon their demand for certain Gods, so they can take what to purchase and how much to purchase.

The Household ‘s outlooks about future income, wealth and monetary values.

The family will do picks to consumer certain goods based on their outlooks about their expected place in the hereafter and the hereafter alterations in monetary values.