Text A, Paragraph 1
The global coffee market has seen a rise in prices, prompting coffee growers in Colombia to increase their production levels. Many farmers are expanding their output in response to these higher prices, reflecting behaviour typically seen in the law of supply.
Define the term law of supply as indicated in bold (Text A, Paragraph 1).
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Text B, Paragraph 2
Steel production in India has been affected by several factors, including a shortage of skilled labour and improvements in production technology. These non-price determinants of supply are playing a key role in shaping the steel industry’s ability to meet market demand.
Define the term non-price determinants of supply indicated in bold (Text B, Paragraph 2).
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Text D, Paragraph 2
As factories in China increase their workforce, they initially experience higher output. Managers have noticed that this pattern changes as more workers are added to production lines. This trend highlights the principle of diminishing marginal returns.
Define the term diminishing marginal returns as indicated in bold (Text D, Paragraph 2).
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Text D, Paragraph 2
In an attempt to reduce plastic waste, the UK government introduced an indirect tax on single-use plastic products. Many manufacturers responded by reducing their production of plastic items, leading to a shift in the market supply.
Outline how indirect taxes can affect the supply of goods, as indicated in bold (Text D, Paragraph 2).
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Text A, Paragraph 2
A series of floods has severely impacted rice production in Southeast Asia. Many farmers have been unable to maintain their previous output levels, leading to a significant reduction in the supply of rice to the global market.
Draw a diagram showing the impact of the floods on rice production in Southeast Asia.
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Text C, Paragraph 3
The auto industry is experiencing growth as multiple car manufacturers increase their production rates. The supply of electric vehicles has risen sharply, increasing competition and availability.
State two factors that could increase the supply of electric vehicles.
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Text E, Paragraph 1
A dairy farm in Ireland produces 500 litres of milk per day. Across the country, numerous farms contribute to the market supply which is sufficient to meet the needs of the population.
Define what is meant by market supply (Text E, Paragraph 1)
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Outline one assumption underlying the law of supply.
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Text A, Paragraph 2
Additional reforms include upgrading old infrastructure and offering incentives to private sector firms to invest in projects that will improve productive capacity. Some government policies are already being implemented. These include a large power plant construction program, tax incentives to infant industries such as oil refining to help attract more investment, and tax cuts for industries like transport, telecommunications, metal production, and agricultural processing. In addition, there has been a decision to reduce fuel subsidies to contribute funds towards the government’s record US$22 billion in infrastructure projects. The subsidies had kept fuel prices low in a country where millions of people live in poverty.
Using a demand and supply diagram, explain the impact on the fuel market of the decision to cut fuel subsidies.
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Text A, Paragraph 2
Australia recently faced an increase in production costs for dairy products due to a rise in the price of feed for livestock. Farmers report that they now need to adjust their output to maintain profitability.
Using a supply and demand diagram, explain how an increase in production costs might affect the dairy market in Australia.
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Text B, Paragraph 1
In Kenya, tea producers have adopted new technology that automates parts of the production process, making it more efficient. The government hopes this will positively impact Kenya’s position in the global tea market.
Using a demand and supply diagram, explain how improvements in technology might affect the market for tea in Kenya.
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Text A, Paragraph 3
In New Zealand, milk and cream are in joint supply from the same raw input. As demand for milk changes, farmers alter their milk production, which also affects the supply of cream as a by-product.
Using a demand and supply diagram, explain the impact on the market for cream when there is an increase in the demand for milk.
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Text A, paragraph 3
In Brazil, farmland is often used for growing either soybeans or sugarcane, both major export crops. Recently, a rise in the global price of soybeans has led many farmers to shift their resources towards soybean cultivation. This shift has reduced the amount of land available for sugarcane, impacting its supply and market prices.
Using a demand and supply diagram, explain how an increase in the price of soybeans might affect the sugarcane market.
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