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Causes of changes in source and demand

Section A- Multiple Choice Questions

When the price of gas rises by 25%, the quantity purchased falls by 10%. This means that the demand for gas is (a). Inelastic to price changes

(b). Flawlessly inelastic to price changes

(c). Elastic to price changes

(d). Perfectly elastic to price changes

The demand for a good is inelastic if:

(a). when the purchase price rises, quantity demand rises

(b) when the purchase price rises, total income falls

(c) When the price rises, total income rises

(d) when the price rises amount demanded comes.

Ceteris paribus, a decrease in the demand for furniture will lead to:

Increased price and reduced quantity supplied

Decreased price and lowered quantity supplied

Decreased price no change in number supplied

Increased price no change in number supplied

If the Petroleum Cartel (OPEC) is likely to cut creation of crude, what will become of the marketplace equilibrium for crude?

Prices will fall, volumes will increased

Prices will increased, volumes will increased

Prices and amounts will stay the same

Prices increase, amounts will decrease

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

Becomes elastic

Remains unchanged

Shifts to the left

Shifts to the right

The price elasticity of demand steps the responsiveness of variety demanded for good X to:

Quantity demanded for good Y

A change in the price tag on good X

Quantity supplied

A change in the end result of good X

Which of the following will cause an enlargement in the way to obtain chicken?

A fall in the price tag on beef

A climb in the price tag on chicken

A go up in vegetarianism

A surge in the price tag on chicken feed

Which of the next would result in a switch of the source curve for mangoes to the left?

A go up in the price tag on apples

A successful marketing campaign for cream

A decrease in the EU subsidies to super fruit growers

An increase in the total numbers of consumers of mangoes

The demand curve for a standard good shifts left when:

The price of the good itself rises

The price of complements rises

The price of substitutes rises

An indirect duty is imposed on the good

Which of the following is not placed constant when a demand curve is attracted?

The price of the good itself

Households' real income

The price of contending goods

The price of complementary goods

Section B

Given the source and demand function:

QD = 100 - 20p

QS = 10 + 40p

Price (P)

Quantity Demanded (QD)

Quantity Supplied (QS)

$. 50

$1. 00

$1. 50

$2. 00

$2. 50

Use the information in the aforementioned table to:

Calculate the equilibrium price. (3 markings)

Calculate the equilibrium quantity demanded and quantity offered and present the info graphically. (6 marks)

With the aid of a diagram, explain the difference between a change in the supply and a activity along the resource curve. (6 grades)

Explain four (4) factors that cause the demand curve to move for a coral mobile. (6 marks)

Shift in Supply vs. Movement along the Source Curve.

If one of the determinant of price changes it triggers the supply curve to shift but if none of the determinants apart from price changes causes a movement across the resource curve.

These other determinants are:

Cost of production

Profitability of related products

Profitability of goods in joint supply

Nature and other unpredictable events

Expectations future price changes.

The difference between a motion along the source curve and a shift of the resource curve is usually distinguished between a big change in resource and a change in quantity supplied.

If the other determinants of supply causes supply to go up the supply curve will switch to the right. The brand new curve (S1) demonstrates each price more Oxford pencils will be supplied.

If the other determinants cause resource to show up, the supply curve will change left. The new curve (S2) implies that at each price less Oxford pencils will be offered.

Factors that Cause the demand Curve to change for a coral telephone.

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

Income open to the household

Income is the payment or the sum of all wages, salaries, earnings, interest obligations, rents received and all the forms of gaining in confirmed time frame.

Prices of other goods and services available.

The price of one good make a difference the price of others. These are goods that substitute or complement one another. The substitute goods are being used as an alternative for others. When the price tag on one good rises, the demand for the other good goes up.

The complementary goods are the goods that accompany each other or 'go alongside one another' such as Eggs and bacon, ackee and saltfish. When the price tag on one good increases, the demand for the other falls and vice versa.

The households flavour and tastes.

The tastes and inclination of family members can impact their demand for certain gods, so they can choose what to buy and how much to buy.

The Household's objectives about future income, wealth and prices.

The household will make selections to consumer certain goods predicated on their anticipations about their expected position in the future and the near future changes in prices.

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