CAIE IGCSE Economics 2.3. Supply Question Bank
Use supply schedules, curves and producer contexts to connect price with quantity supplied and explain how changing production conditions shift market supply.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- Define supply as producers being willing and able to sell a quantity at a given price and time.
- Calculate or interpret an extension or contraction when price changes along the supply curve.
- Explain a supply shift using productivity, input costs, taxes, subsidies or weather.
Covered syllabus points
2.3. Supply question 1
Davos is a ski resort in Switzerland famous for hosting a world economic conference for leaders from both private and public sectors. Topics discussed usually relate to global economic development. Hospitality firms in Davos depend on seasonal migrant labour, especially when they want to increase the supply of goods and services quickly.
Define supply.
2.3. Supply question 2
The table shows the supply for a product at different prices.
If the price changes from $ 12 to $ 14, what will be the change in supply?
A
Supply will contract by 40 units and there will be a movement down along the supply curve.
B
Supply will contract by 200 units and there will be an inward shift of the supply curve.
C
Supply will extend by 40 units and there will be a movement up along the supply curve.
D
Supply will extend by 200 units and there will be an outward shift of the supply curve.
2.3. Supply question 3
Read the source material carefully before answering Question 1.
Source material: Gabon's industries and labour force
Gabon is a small West African country. Its rainforests reduce air pollution, provide wood for timber production, protect against floods and reduce soil erosion. The Gabonese Government wants to conserve the country's rainforests. It has created some national parks which has increased tourism, affecting the current account of the balance of payments.
The Gabonese Government wants to reduce the country's reliance on timber production, oil production and agriculture. The country is Africa's fifth-largest oil producer but its resources of oil are running out. The oil industry causes water pollution. The country has other natural resources, including gold. In 2022, new deposits of gold were found in Gabon.
Gabon's agricultural industry employs a high proportion of the country's labour force. Fig. 1.1 shows the literacy rate and the percentage of the labour force employed in agriculture in six selected countries in 2022.
Fig.1.1 The literacy rate and the percentage of the labour force employed in agriculture in selected countries in 2022
In recent years, Gabon has experienced a high rate of unemployment among 15-24 year olds. High rates of youth unemployment can result in young people not gaining the skills and experience needed to achieve high productivity. It can also have a harmful effect on their confidence. Some governments pay private sector firms to give work experience to unemployed young people. The quality of this experience can vary.
The Gabonese Government wants to develop its textile industry, encouraging firms to grow in size. The output of the industry will be affected not only by possible government support but also by its use of technology and specialisation of workers.
Draw a demand and supply diagram to show the effect of the discovery of new gold deposits on the market for gold.
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