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IGCSEEconomicsCambridge (CIE)Exam Questions2. The Allocation of Resources2.3 Demand

Demand (Cambridge (CIE) IGCSE Economics)

Exam Questions

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2.3 Demand

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2.3 Demand

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11 mark

A market consists of 10 individuals with different demand curves in a given period.

What is a calculation that could be used as part of the process to determine the market equilibrium in that period?

  • at each price add the quantities demanded by each individual

  • at each quantity average the price that each individual is prepared to pay

  • combine the price elasticity of demand (PED) and the price elasticity of supply (PES) at each price

  • determine the PED and multiply it by the quantity demanded

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21 mark

The table shows the demand schedule for a good at different prices.

price $

quantity demanded

8

10

12

14

200

160

120

60

The current market price for the good is $10.

Following a 20% increase in price, what will be the change in the quantity demanded?

  • – 60

  • – 40

  • +120

  • +200

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31 mark

What term describes a change in the quantity demanded of a product due to a change in its own price, while other factors remain constant?

  • Shift in demand

  • Elasticity of demand

  • Movement along the demand curve

  • Shift in supply

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41 mark

What does a movement along the demand curve represent?

  • Changes in consumer preferences

  • Shifts in the supply curve

  • Changes in the quantity demanded due to price changes

  • Changes in income levels

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51 mark

When the price of a product decreases, what is likely to happen along the demand curve?

  • A shift to the left

  • A movement to the right

  • A movement upward

  • No change in position

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11 mark

The diagram shows the demand curve for coffee in the US.

646401-nov-2020-qp-13-fig-6

Why did the quantity demanded move from Q1 to Q2?

  • Coffee became cheaper.

  • Incomes rose in the US.

  • There was a successful advertising campaign by coffee retailers.

  • The price of substitutes for coffee rose.

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21 mark

Petrol (fuel) retailers in a country have noticed a sharp increase in sales in August when many people take their holidays.

Why might this take place?

  • Consumers’ demand curve for petrol shifts to the left in August.

  • Consumers’ demand curve for petrol shifts to the right in August.

  • Oil refineries increase their output in August.

  • Travel companies increase their hotel prices in August.

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31 mark

The diagram shows the demand for and the supply of air travel.

screen-shot-2023-07-31-at-10-42-38-am

What could cause a shift of the demand curve from D1 to D2?

  • an increase in airline costs

  • an increase in airport taxes

  • an increase in incomes

  • an increase in worldwide terrorism

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41 mark

When the price of a product increases and the quantity demanded decreases, what is the outcome?

  • A movement to the left along the demand curve

  • A movement to the right along the demand curve

  • A shift in the demand curve

  • No change in the demand curve

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51 mark

When the price of a product decreases and leads to an increase in the quantity demanded, what type of movement along the demand curve is this called?

  • Expansion of demand

  • Contraction of demand

  • Elastic demand

  • Inelastic demand

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11 mark

The table shows the sales of cold drinks made by a company in the UK in 2016 and 2017. Demand for cold drinks is influenced by changes in the temperature. In 2016 the sales followed the usual seasonal pattern.

month

sales 2016 (thousand cans)

sales 2017 (thousand cans)

April

May

June

July

August

300

400

550

570

620

290

350

270

490

590

In which month of 2017 was the usual pattern disturbed?

  • May

  • June

  • July

  • August

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21 mark

What is the key distinction between individual demand and market demand?

  • Individual demand reflects the demand of producers, while market demand reflects consumers

  • Individual demand is the sum of all consumers' demands, while market demand is the demand of a single consumer

  • Individual demand represents the quantity demanded by a single consumer, while market demand represents the sum of all consumers' quantities demanded

  • Individual demand and market demand are synonymous terms in economics

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31 mark

In the context of market demand, what does the term "ceteris paribus" imply?

  • Demand remains constant over time

  • All factors influencing demand change simultaneously

  • The price of the product is fixed

  • All factors influencing demand are held constant except for the price of the product

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41 mark

Which factor can lead to an increase in the demand for a product?

  • A decrease in consumer income

  • A decrease in the price of a substitute good

  • A decrease in the price of a complementary good

  • A decrease in production costs

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51 mark

Which of the following is NOT a condition that can lead to a change in the demand for a product?

  • Changes in consumer income

  • Changes in the price of related goods

  • Changes in consumer preferences and tastes

  • Changes in production technology

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