Economic foundations and Supply &

Demand
1a. 19M.1.SL.TZ1.1a [10 marks]

Explain the concepts of consumer surplus and producer surplus.

2a. 19M.1.SL.TZ2.1a [10 marks]

Explain two factors which could shift a firm’s supply curve to the left.

3a. 18N.1.SL.TZ0.1a [10 marks]

Explain how the price mechanism reallocates resources when there is an increase in demand for
a good or service.

4a. 18M.1.SL.TZ1.2a [10 marks]

Explain two factors that would lead to an increase in the demand for a product.

5a. 18M.1.HL.TZ1.1a [10 marks]

With reference to the concept of excess demand, explain how a decrease in supply of a good
would lead to a new market equilibrium.

6a. 17M.1.SL.TZ1.01a [10 marks]

A fall in income leads to a fall in demand for a good. Explain this relationship between the
demand for the good and consumer income.
7a. 17M.1.HL.TZ2.01a [10 marks]

Explain how an increase in the costs of factors of production would affect the market
price and output of a good.

8a. 16N.1.SL.TZ0.1a [10 marks]

Using a production possibilities curve (PPC) diagram, explain why choices have to be made in all
economies.

9a. 16N.1.SL.TZ0.2a [10 marks]

Explain why changes in the price of goods and services may lead to changes in resource
allocation.

10a. 16M.1.SL.TZ1.1a [10 marks]

Distinguish between the effect of an increase in income and an increase in the price of a good on
the demand for the good.

11a. 16M.1.SL.TZ1.2a [10 marks]

Explain one supply factor and one demand factor that might lead to a rise in the price of rented
housing.

12a. 16M.1.SL.TZ2.2a [10 marks]

Explain one supply factor and one demand factor that might lead to a rise in the price of rented
housing.

13a. 15N.1.SL.TZ0.02a [10 marks]

Explain the concepts of consumer surplus and producer surplus in the market for air travel.
14a. 15M.1.SL.TZ1.02a [10 marks]

Explain the view that an increase in price will lead to a decrease in the quantity demanded
whilst an increase in demand will lead to an increase in price.

15a. 15M.1.SL.TZ2.01a [10 marks]

Explain the view that an increase in price will lead to an increase in the quantity supplied whilst
an increase in supply will lead to a decrease in price.

16a. 15M.1.SL.TZ2.02a [10 marks]

Explain the likely effects of falling costs of factors of production on price and output in
agricultural markets.

17a. 15M.1.HL.TZ1.01a [10 marks]

Explain how changes in price work to reallocate resources in a market.

18a. 15M.1.HL.TZ2.01a [10 marks]

Explain how changes in price work to reallocate resources in a market.

20a. 14N.1.SL.TZ0.2a [10 marks]

Explain that when producer surplus and consumer surplus are maximized, allocative efficiency
is achieved.

21a. 14N.1.HL.TZ0.1a [10 marks]

Using diagram(s), explain the signalling and incentive functions of price.

23a. 14M.1.SL.TZ2.1a [10 marks]

Explain three factors that could lead to an increase in demand for cigarettes.

24a. 14M.1.HL.TZ1.1a [10 marks]

Using diagrams, explain how a change in one of the determinants of demand might increase the
price of rice and how a change in one of the determinants of supply might decrease the price of
rice.