A warm British summer is likely to result in what impact on the ice cream market?

A shift in the demand curve to the right.

Government subsidies would cause:

A shift in the supply curve to the right

How is the introduction of a 'sugar tax' on soft drinks likely to affect the carbonated drinks market?

A shift in the supply curve to the left.

A fall in demand for mushrooms (D to D2 in the diagram) causes:

A decrease in the equilibrium price

Describe the relationship between supply and demand shown in the diagram (S shifts to the right to right to S1).

A competitor has entered the market: an increase in supply.

An increase in supply (S to S1 in the diagram) causes:

A decrease in the equilibrium price

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Edexcel A Level Business - 1.2 The market - Theme 1

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#Edexcel A Level #Business - 1.2 The market - Theme 1

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Questions 15

Answers

1
Which product/service is likely to have the lowest income elasticity of demand?
Bus travel
Fine wines
Sports cars
Taxi travel
2
A warm British summer is likely to result in what impact on the ice cream market?
A shift in the demand curve to the left.
A shift in the supply curve to the left.
A shift in the supply curve to the right.
A shift in the demand curve to the right.
3
A good with a negative income elasticity of demand is referred to as:
Normal
Luxury
Inferior
Superior
4
A good with a price elasticity of demand of -1.2 could be described as:
Very price elastic
Slightly price elastic
Slightly price inelastic
Very price inelastic
5
The formula for price elasticity of demand (PED) is:
PED = % Δ P / % Δ Qd
PED = % Δ Qd / % Δ P
PED = % Δ Qd x % Δ P
PED = % Δ Qd / % Δ P x 100
6
Government subsidies would cause:
A shift in the supply curve to the left
A shift in the demand curve to the right
A shift in the demand curve to the right
A shift in the supply curve to the right
7
How is the introduction of a 'sugar tax' on soft drinks likely to affect the carbonated drinks market?
A shift in the demand curve to the right.
A shift in the supply curve to the left.
A shift in the supply curve to the right.
A shift in the demand curve to the left.
8
A fall in demand for mushrooms (D to D2 in the diagram) causes:
A decrease in the equilibrium price
No change in equilibrium price
An increase in the equilibrium price
A extension in supply
9
Describe the relationship between supply and demand shown in the diagram (S shifts to the right to right to S1).
A competitor has left the market: a fall in supply.
Consumer incomes rise: an increase in demand.
Consumer incomes fall: a fall in demand.
A competitor has entered the market: an increase in supply.
10
If the price of a good is reduced by 10% and demand increases by 20%, what is the PED?
-2
10
0.5
20
11
The formula for income elasticity of demand (YED) is:
YED = % Δ Qd x % Δ Y
YED = % Δ Qd / % Δ Y x 100
YED = % Δ Qd / % Δ Y
YED = % Δ Y / % Δ Qd
12
If incomes rise by 5% and demand for a good rises by 20%, what is the YED?
0.25
-0.25
4
-4
13
Which of the following is not likely to result in a change in supply?
government subsidies
introduction of new technology
promotion and branding
changes in the costs of production
14
Which of the following is not likely to result in a change in demand?
advertising and branding
changing costs of production
external shocks
changes in the prices of substitutes and complementary goods
15
An increase in supply (S to S1 in the diagram) causes:
An increase in the equilibrium price
An contraction in demand
No change in the equilibrium price
A decrease in the equilibrium price

Edexcel A Level Business - 1.2 The market - Theme 1 Flashcards | StudBud