IGCSEEconomicsCambridge (CIE)Exam Questions2. The Allocation of Resources2.6 Price Changes

Syllabus Edition

First teaching 2018

Last exams 2026

Price Changes (Cambridge (CIE) IGCSE Economics): Exam Questions

Exam code: 0455 & 0987

2 hours35 questions

Select a download format for 2.6 Price Changes

Scroll for more

Select an answer set to view for
2.6 Price Changes

Easy
Medium
Hard
11 mark

A large amount of the agricultural products in a country were damaged by floods.

What is likely to have happened to the price of agricultural products and the volume of imports of agricultural products?

 

price of products

volume of imports


A

B

C

D


fall

fall

rise

rise


fall

rise


fall


rise

    Choose your answer

    21 mark

    What happens to the market for umbrellas when it starts raining?

    • Demand decreases

    • Demand increases

    • Supply decreases

    • Supply increases

    Choose your answer

    31 mark

    If consumer incomes increase, what effect might this have on the equilibrium price and quantity of cinema tickets?

    • Equilibrium price increases, equilibrium quantity decreases

    • Equilibrium price decreases, equilibrium quantity decreases

    • Equilibrium price increases, equilibrium quantity increases

    • Equilibrium price remains unchanged, equilibrium quantity increases

    Choose your answer

    41 mark

    If a technological advancement reduces the cost of production for a product, what is likely to happen to its equilibrium price and quantity?

    • Equilibrium price decreases, quantity decreases

    • Equilibrium price increases, quantity decreases

    • Equilibrium price decreases, quantity increases

    • Equilibrium price increases, quantity increases

    Choose your answer

    51 mark

    Suppose the price of a complementary good decreases. How would this likely affect the equilibrium price and quantity of the main product?

    • Equilibrium price would increase, quantity would decrease

    • Equilibrium price and quantity would both increase

    • Equilibrium price would decrease, quantity would increase

    • Equilibrium price and quantity would both decrease

    Choose your answer

    11 mark

    In 2018 the UK government introduced a tax on the production of sugary drinks. How would this affect the market for sugary drinks as shown on a demand and supply diagram?

     

    demand curve for sugary drinks

    supply curve of sugary drinks


    A

    B

    C

    D


    contraction in demand

    extension in demand

    shift to the left


    shift to the right


    shift to the left


    shift to the right


    contraction in supply

    extension in supply

      Choose your answer

      21 mark

      The table shows the quantity demanded and supplied for a commodity at different prices.

      price ($)

      quantity demanded

      quantity supplied

      10

      9

      8

      7

      6

      100

      210

      400

      500

      600

      800

      700

      600

      500

      400

      What would happen to the equilibrium price if the quantity supplied increased by 200 units at each price?

      • It would decrease by $1.

      • It would decrease by $2.

      • It would increase by $1.

      • It would increase by $2.

      Choose your answer

      31 mark

      If a substitute good becomes more expensive, what effect does this have on the equilibrium price and quantity of the original good?

      • Equilibrium price decreases, quantity decreases

      • Equilibrium price increases, quantity increases

      • Equilibrium price increases and the quantity decreases

      • Equilibrium price decreases and quantity increases

      Choose your answer

      41 mark

      What effect does an increase in the number of suppliers have on the equilibrium price and quantity of a product?

      • Equilibrium price decreases, quantity increases

      • Equilibrium price increases, quantity decreases

      • Equilibrium price and quantity both decrease

      • Equilibrium price and quantity both increase

      Choose your answer

      51 mark

      In 2019 the Malaysian government increased a per litre subsidy on the production of petrol. How would this affect the market for petrol as shown on a demand and supply diagram?

       

      demand curve for petrol

      supply curve of petrol

      A

      B

      C

      D

      extension in demand

      contraction in demand

      shift to the left


      shift to the right

      shift to the right

      shift to the left

      contraction in supply

      extension in supply

        Choose your answer

        11 mark

        The diagram shows the global market for copper with an equilibrium point of X.

        Supply and demand graph showing shifts. Supply lines S1, S2, S3 intersect demand lines D1, D2, D3 at points A, B, C, X, and D. Axes labeled price and quantity.

        Which point represents the new equilibrium after the copper producers’ costs increase and there is rapid global economic growth?

          Choose your answer

          21 mark

          The diagram shows the market for a firm making clothing with an initial equilibrium of X.

          nov-2018-v2qp-p1-cie-eco-q5

          What will be the new equilibrium if there is a successful advertising campaign by a rival firm and an increase in workers’ wages?

            Choose your answer

            31 mark

            In 2015, the world price of oil fell rapidly due to changes in the conditions of demand and supply. One change was the use of a new method of extraction called fracking.

            Which event would not have contributed to the fall in prices?

            • China’s growth slowed leading to lower oil imports.

            • Saudi Arabia increased the volume of its oil supplies.

            • UK protest groups prevented the introduction of fracking projects.

            • USA became more self-sufficient in oil due to fracking and reduced imports.

            Choose your answer

            41 mark

            The diagram shows the market for sugar in Singapore with an equilibrium point of X.

            Supply and demand graph showing shifts. Supply lines S1, S2, S3 intersect demand lines D1, D2, D3 at points A, B, C, X, and D. Axes labeled price and quantity.

            Which point represents the new equilibrium after the government legislates that fizzy drinks have to halve their sugar content and two of the three sugar manufacturers decide to leave the market?

              Choose your answer

              51 mark

              The diagram shows the market for a firm making electric vehicles with an initial equilibrium at X.

              nov-2018-v2qp-p1-cie-eco-q5

              What will be the new equilibrium if there is an increase in the government subsidy for electric vehicles and a 40% increase in the cost of petrol?

                Choose your answer