Price Determination in Competitive Markets (AQA A Level Economics): Exam Questions

Table 3 shows the demand for and supply of oranges at a range of prices between 10 pence and 30 pence.

Table 3

As a result of an increase in consumers’ incomes, the demand for oranges increases by 25% at each of the prices shown in Table 3.

After the rise in incomes:

All other things being equal, the demand for labour is more likely to be wage elastic if

The diagram below shows the market demand (D) curve and two supply (S₁ and S₂) curves for a brand of soft drink. The drink is a demerit good because of its high sugar content. The government imposes an indirect tax on each can sold that cuts consumption by 100 000 cans per week.

If the price elasticity of demand for the drink is –2.0, the price must have increased by

Beef and leather are in joint supply. Changes in farming methods have resulted in a significant fall in the price of chicken, a substitute for beef. All other things being equal, which one of the following diagrams, A, B, C, or D, best illustrates the effects of the fall in the price of chicken on the market for leather?

The diagram below shows two market demand curves (D₁ and D₂) and the market supply curve (S), for Good X.

The price elasticity of supply of Good X when the demand curve shifts from D₁ to D₂ is

At the initial market equilibrium, the income elasticity of demand for fresh chickens is +1.5, and the price elasticity of supply is +1.0. Then there is a 5% increase in consumers’ income.

Which one of the following combinations, A, B, C or D, is most likely to show the changes in the market equilibrium price and quantity?

The diagram below shows the demand curves (D₁ and D₂) and the supply curve (S) in the market for good X. The initial market equilibrium is at E₁.  

The increase in market demand from D₁ to D₂ results in a new market equilibrium at E₂. The market mechanism that leads to the establishment of the new equilibrium is based on

The price elasticity of demand for games consoles is -1.2. It can be concluded that a 10% reduction in their price would lead to a percentage change in demand of

The price of good Y, a substitute for good X, rises from 75p to £1. As a result, the quantity of demand for good X rises from 3 million units to 5 million units per month.

What is the value of the cross elasticity of demand for good X with respect to good Y?

Figure 8 shows two demand (D1 and D2) curves and two supply (S1 and S2) curves in the market for tea

Tea and coffee are substitutes. All other things being equal, which one of the following is the most likely explanation of the move from E1 to E2 in the market for tea?

Figure 1 shows the demand for lemons.

The fall in price and increase in the quantity demanded of lemons could have been caused by

Carrots and potatoes are grown using the same factors of production. Figure X shows the demand (D_C) and supply (S_C) curves for carrots. Figure Y shows the demand (D_P) and supply (S_P) curves for potatoes. A change in people’s preferences shifts the demand for carrots from D_C1 to D_C2. As a result, the supply of potatoes shifts from S_P1 to S_P2.

Which one of the following statements correctly explains the changes shown in Figures X and Y?

Table 1 shows the price of a packet of peanuts and the number of packets of cashew nuts sold in a shop in one month. The price of a packet of cashew nuts is unchanged.

Table 1

When the price of a packet of peanuts rises from £0.80 to £0.84, the cross elasticity of demand for cashew nuts with respect to the price of peanuts is

Figure 3 shows the demand curve (Demand) and the supply curve (Supply) for bus travel within a city. The initial market equilibrium price is P.

To reduce pollution, the city council pays bus companies to provide bus travel free of charge. As a result of this policy, consumer surplus will increase by the area

Figure 3 shows the demand curve for a firm’s scarves.

Which one of the following statements is true when the price of scarves is reduced from £30 to £25?

Which one of the following is a reason why the supply of cars is likely to be price elastic in the short run when the price of cars increases?

A household's annual income increases from £35 000 to £38 500. All other things being equal, if the household's income elasticity of demand for Good X is –0.2 and its income elasticity of demand for Good Y is 0.4, which one of the following statements is correct?

Figure 3 shows how the markets for Good X and Good Y are affected by an increase in the demand for Good X

It can be concluded that Good X and Good Y are in