Question 6
[Maximum number: 1]
Which statement defines market equilibrium?
A
when ceteris paribus no longer applies
B
when quantity demanded equals quantity supplied
C
when quantity demanded is equal to price
D
when supply can no longer expand
CAIE A-Level Economics 2.4 Demand and Supply Interaction Question Bank
Practise combining demand and supply to determine equilibrium, trace simultaneous shifts, calculate shortages or surpluses and explain joint demand, joint supply and price…
Exam points
- calculate equilibrium or disequilibrium by comparing quantity demanded with quantity supplied
- draw one or both curve shifts and identify the new equilibrium price and quantity
- apply joint demand, joint supply and signalling, rationing or incentive functions to markets
Covered syllabus points
Question 6
[Maximum number: 1]
What is not a function of the price mechanism?
A
to act as a signal to firms when allocating resources
B
to maximise consumer surplus
C
to provide an incentive to firms to produce goods
D
to ration scarce resources
Question 2(a)
[Maximum number: 8]
In 2022 the supply of root ginger from Nigeria, Africa's biggest producer, fell by 20%. Market demand was expected to grow by more than 5%.
With the help of a demand and supply diagram, explain how the market equilibrium for root ginger in Nigeria is likely to change and consider how certain you are of the new market price.
Question 11
[Maximum number: 1]
The demand for electric vehicle batteries is derived from the demand for electric vehicles. To tackle climate change, a government subsidises producers of electric vehicles.
What are the likely effects of this subsidy on the price and sales of electric vehicle batteries?
price
sales
decrease
decrease
decrease
increase
increase
decrease
increase
increase