Economics

Mr. Saul Jenkins

Sebastian Torres
12th Grade

Demand and Supply

1. What name is given to an arrangement which enables buyers and sellers to do

business with one another?
Market, which is considered to be the oldest form of exchange.
2. Give two reasons why people will tend to buy more of a good when its price falls.
- When prices decrease the demand increases, seeing as more people are
willing to buy the goods since more goods fit into their budgets or income
without making any alterations.
- When buying people look at multiple substitutes and decide depending on
the price that best fits them, when the prices decrease it becomes more
attractive and buyers will consider it over the other substitutes.
3. ‘With so many poor people living in the area, there is bound to be a great
demand for all kinds of consumer goods.’ Is this a sensible statement? Explain
your answer
No, is just reality. While the population is at a greater economic disadvantage,
there is a higher demand for basic consumer goods, such as housing, food and
water. Some people may consider it sensible, due to the peoples capability to
obtain said goods.
4. Tennis rackets and tennis balls are purchased together. Of what kind of demand
is this an example?
Substitute goods, these are products that are used together. When one proce
increases, the demand for the other does as well.
5. The figure shows the demand for beef.
 Which one of the following is likely to cause the movement of the demand curve
from DD to D1D1, as shown in the diagram?
a. A fall in the price of beef
b. An increase in the prices of pork and lamb
c. A fall in consumers’ incomes
d. A fall in the supply of beef
6. The figure shows the supply of television sets

Which one of the following is likely to cause the movement of the supply curve
from SS to S1S1, as shown in the diagram?
a. An increase in the prices of the materials used to make television sets
b. An increase in VAT
c. A fall in the price of television sets
d. An increase in the productivity of the factories making television sets
7. The table below shows the demand and supply schedules for a particular
commodity.
 a. Plot the supply and demand curves on a sheet of graph paper
b. Draw horizontal and vertical lines to show the equilibrium price and
quantity demanded and supply at this price

c. What is the total revenue at the equilibrium price?

$​6; for a demand and supply point of 40 units

Now assume demand doubles at all proces, with the supply remaining
unchanged.
d. Plot the new demand curve
e. What is the new equilibrium price?
$​8
f. What is the quantity demanded and supplied at this price?
60 units