Part 2 - Economics Market Demand and Supply Quiz

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Questions and Answers

Given the following data for the market demand and supply of strawberries in a particular week/ Consider the table provided and answer the following question: What is the market demand at £40 per carton?

1 cartons (correct)

10 cartons (correct)

9 cartons

What effect does a "bumper crop" have on the supply curve for strawberries?

Supply curve shifts left

Supply curve shifts right. (correct)

Demand curve shifts left.

Demand curve shifts right

If the equilibrium price of strawberries before the bumper crop was £45, what is the new equilibrium with the bumper crop?

£50

£45

£40 (correct)

£35

A strict loan policy by banks decreases borrowing for house purchases. How does this affect the demand for houses?

Demand curve shifts left. Signup and view all the answers

How does an improvement in the A40, making commuting to Central London easier, impact the demand for houses in Ealing?

Demand curve shifts right. Signup and view all the answers

If the government relaxes housing development restrictions, what happens in the housing market?

Supply curve shifts right. Signup and view all the answers

With a bumper crop, what happens to the equilibrium quantity of strawberries?

Increases Signup and view all the answers

The Monetary Policy Committee raises interest rates. How does this affect the housing market?

Demand shifts left. Signup and view all the answers

A drought in wheat-growing areas affects the wheat supply curve by:

Shifting left. Signup and view all the answers

What impact would higher house prices in nearby Wembley have on the Ealing housing market?

It would increase demand for housing in Ealing. Signup and view all the answers

Given the weekly demand and supply schedules for T-shirts (in millions):

What is the equilibrium price and quantity?

£5 and 12 million Signup and view all the answers

If T-shirt demand increases by 4 million at each price, what is the new equilibrium price and quantity?

£6 and 14 million Signup and view all the answers

How would a bumper strawberry crop impact the equilibrium price of strawberries?

Decrease Signup and view all the answers

If the price of bread rises, what is likely to happen to butter demand?

Decrease Signup and view all the answers

A seasonal increase in vegetable supply affects prices by:

Decreasing prices due to higher supply Signup and view all the answers

A government tax on butter would likely result in which of the following outcomes?

Decrease the supply of butter in the market Signup and view all the answers

In the oil market, if new oil fields start production, what will happen?

Shift supply right Signup and view all the answers

If butter producers anticipate a future price increase, they might:

Hold back inventory for future sales. Signup and view all the answers

If better technology reduces oil refining costs, the supply curve for oil:

Shifts right Signup and view all the answers

What effect does a rise in interest rates typically have on the housing market?

Demand shifts left Signup and view all the answers

How does stricter loan policies by banks affect the demand curve for houses?

It shifts left Signup and view all the answers

What is the expected impact on the demand curve for houses in Ealing if the A40 is improved?

Demand increases Signup and view all the answers

What happens to house prices when housing development restrictions are lifted?

Prices decrease Signup and view all the answers

Which scenario is most likely to cause an increase in demand for wheat?

Increased economic growth in Asia Signup and view all the answers

In the event of a bumper crop season for strawberries, what occurs to the supply curve?

Shifts to the right Signup and view all the answers

If production costs for butter decrease, what is the likely effect on the butter supply curve?

The curve shifts to the right Signup and view all the answers

When shifting the supply curve to the right for a product, which of the following is a likely cause?

Technological advancements Signup and view all the answers

What effect do higher interest rates have on the supply of housing?

Decrease the supply of housing Signup and view all the answers

What is the most likely result of increased global warming on the supply curve for wheat?

Leftward shift in supply Signup and view all the answers

How does the in-season availability of fresh vegetables impact their prices?

Prices decrease due to surplus supply Signup and view all the answers

What happens to the supply curve when the cost of building houses increases?

Shifts leftward due to decreased supply Signup and view all the answers

When consumer preference shifts from central heating oil to gas heating due to lower gas prices, what occurs in the oil market?

Shift left in the demand for oil Signup and view all the answers

What impact does a tax on butter production typically have on the supply curve?

Decreases the overall supply of butter Signup and view all the answers

If new technology reduces oil refining costs, how does this affect the oil supply?

Rightward shift in supply due to decreased costs Signup and view all the answers

What is the likely effect on the housing market if banks implement strict loan policies?

Decreased demand for housing Signup and view all the answers

What happens to the supply curve for bread when there is a poor wheat harvest?

The supply curve shifts left. Signup and view all the answers

How do higher exchange rates impact the supply of holiday packages?

They increase operational costs, reducing availability. Signup and view all the answers

What is the likely effect on the demand for butter if the price of bread rises?

Demand for butter will decrease. Signup and view all the answers

What immediate impact does an expected future rise in butter prices have on current demand?

It leads to an immediate increase in demand. Signup and view all the answers

What happens to the demand for bread if the price of rice rises significantly?

Demand for bread increases. Signup and view all the answers

What effect does the invention of cholesterol-free butter likely have on demand?

Demand for cholesterol-free butter increases. Signup and view all the answers

How does poor weather affect the demand for holidays abroad?

It increases demand for foreign holidays. Signup and view all the answers

What is the expected effect on butter prices when there is a rise in yoghurt demand?

Butter prices will increase. Signup and view all the answers

Study Notes

Supply and Demand Shifts

Supply shifts right: When producers are willing to offer more goods at each price level, supply shifts to the right.
Supply shifts left: When producers offer fewer goods at each price level, supply shifts to the left.
Demand shifts right: When consumers want more goods at each price level, demand shifts to the right.
Demand shifts left: When consumers want fewer goods at each price level, demand shifts to the left.

Factors Affecting Supply and Demand

Higher interest rates reduce demand for housing: This shift left in demand occurs because it makes mortgages more expensive.
Improved wheat-growing technology increases supply of wheat: This shift right in supply occurs because more wheat can be produced at each price level.
Poor climate conditions reduce supply of wheat: This shift left in supply occurs because it negatively impacts wheat yields.
Seasonal supply increases reduce prices of fresh vegetables: This shift right in supply occurs due to greater harvests, leading to a surplus.
Increased demand raises the equilibrium price: This causes suppliers to offer more products at the higher price, resulting in a movement up along the supply curve.
Increased cost of building houses reduces supply of houses: This shift left in supply occurs because builders are less able to supply houses at each price level.
Falling gas prices reduce demand for central heating oil: This occurs because consumers switch to gas-fired heating, resulting in a movement down along the existing supply curve.
Taxes raise production costs reduce supply of butter: This shift left in supply occurs because producers are less willing to supply butter at each price level.
New technology decreases oil refining costs increases supply of oil: This shift right in supply occurs because it reduces the cost of production.
Rising price of non-dairy spreads increases demand for butter: This shift right in demand occurs because consumers switch to the cheaper alternative.
Stricter bank loan policies reduce demand for houses: This shift left in demand occurs because fewer people can afford loans.
Improved transport links increase demand for houses: This shift right in demand occurs because it increases the desirability of an area for living.
Relaxed housing development restrictions increase supply of houses: This shift right in supply occurs because it makes it easier for builders to construct houses.
Economic growth in Asia increases demand for wheat: This shift right in demand occurs because the rising income levels allow greater consumption.
Bumper crop seasons increase supply of strawberries: This shift right in supply occurs because more strawberries can be produced at each price level.
Poor wheat harvest reduces supply of bread: This shift left in supply happens because less wheat results in less bread being produced.
Rising bread prices decrease demand for butter: This shift left in demand occurs because consumers purchase less bread and therefore less butter.
Expected future rise in butter prices increases demand for butter: This shift right in demand occurs because consumers stock up on butter in anticipation of higher prices.
Poor weather at home increases demand for holidays: This shift right in demand happens because people seeking better weather will travel more.
Invention of cholesterol-free butter increases demand for butter: This shift right in demand occurs because more people find it appealing.
Higher exchange rates decrease supply of holidays: This shift left in supply happens because it increases costs for tour operators, limiting their ability to offer holidays.
Rising rice prices increase demand for bread: This shift right in demand occurs because consumers switch to a cheaper alternative.
Rising yogurt demand has no effect on butter prices: These are separate products with no direct relationship.

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Description

Test your understanding of market demand and supply with this quiz focused on strawberries. Analyze the data for various prices and determine the total market demand based on individual demands. This quiz will enhance your skills in basic economic concepts applicable to real-world scenarios.