Additional Short Questions: Chapter 2
1. Identify points A, B, C, D and E in the diagram below.
E
B
A
C
D
2. What might cause B to shift to B’ as shown below?
B
E
B’
A
C
D
3. From the figure in Question 2, explain the effect of a shift from B to
B’ in terms of equilibrium effects.
4. What would cause C to shift to C’ as shown?
E
B
A
C’
C
D
5. What effect does the movement in C to C’ have on equilibrium?
6. Explain the relationship that exists between:
a) Price and quantity demanded.
b) Income and quantity demanded.
c) The price and quantity demanded of substitute goods.
d) The price and quantity demanded of complementary
goods.
7. What makes economies’ production possibilities grow over time?
8. Below is the demand and supply schedule for Mini Disk players.
What is the equilibrium price and quantity for Mini Disk players?
Price
£800
£700
£600
£500
£400
£300
Q demanded
100
150
200
250
300
350
Q supplied
400
350
300
250
200
150
If the introduction of MP3 players to the portable music player
industry causes the quantity demanded of Mini Disk players to fall by
100 at each price level, what is the new equilibrium price and
quantity?
9.
Differentiate between price floors and price ceilings, by
describing each and explaining who benefits from each.
10. Explain why some individuals have backward-bending supply
curves.