Revision Test_2 Grade 10 Economics Topics: (marketing forces) No.

of questions: 30
1. A good is successfully advertised. What is the most likely impact on the demand and supply curves for the good?

Time: 45 min

2. The diagram shows the supply and demand curves for a good. The market is in equilibrium at point X.

What is the excess demand at price P? A PT B QR C QT

D ST

3. The table shows the value of the price elasticity of demand for four products

What would have an increase in sales revenue if prices rose by 10 %? A cars only C radios and salt B cars and mobile phones D salt only 4. Tea and sugar are complementary goods. What will happen if the price of tea falls, other things being equal? A The demand curve for sugar will move to the right. B The demand curve for tea will move to the right. C The price of sugar will fall. D The supply curve of sugar will move to the left

5. The price of a good is temporarily above the market equilibrium price. What must happen for the market to be brought back to equilibrium?

6. What is not held constant in calculating a demand schedule? A the incomes of consumers B the prices of complementary goods C the price of the good itself D the tastes of consumers 7. As petrol prices increase, demand for petrol remains constant. What does this say about the price elasticity of petrol? A The demand is price-elastic. B The demand is price-inelastic. C The supply is price-elastic. D The supply is price-inelastic. 8. The price elasticity of demand for a good is unitary. What would be the effect of a 1 % fall in its price? A to increase total revenue by 0.1 % B to leave quantity demanded unchanged C to leave total revenue unchanged D to reduce quantity demanded by 1 % 9. What is an important influence on price elasticity of demand? A average earnings B tastes of consumers C the cost of living D the number of close substitutes 10. The diagram shows demand and supply curves for a good. The market is in equilibrium at point X. What would be the new equilibrium position if there were a successful advertising campaign for the good and an increase in the cost of raw materials?

11. In 2002 the world price of cocoa was higher than in 2001. Which combination of changes in the demand for and the supply of cocoa would always lead to a rise in price?

12. A product has a price elasticity of demand that is greater than one. What will happen to total revenue if the price of the product is reduced by 3 %? A It will fall by more than 3 %. B It will fall to zero. C It will be unchanged. D It will rise. 13. The diagram shows a change in the demand for a companys products as a result of a change in advertising.

What has increased? A the cost of advertising to the company B the cost of advertising to a rival company C the expenditure on advertising by the company D the expenditure on advertising by a rival company 14. The demand for and supply of a good both change. As a result the price of the good rises but the quantity traded remains the same. What must have happened to demand and supply?

15. In a market there is a shortage of a good. What change would cause the market to come to an equilibrium? A an increase in demand B a decrease in supply C a fall in price D a rise in price

16. The diagram shows the supply curve for a good.

What is the price elasticity of supply when the price rises from $2 to $4? A 0.2 B 0.5 C1 D2 17. A firm changes the price of its product and finds that its revenue increases. What combination of price change and price elasticity of demand would have caused this?

A government wishes to impose a tax on a good to raise revenue. It would be most likely to achieve this aim if the price elasticity of demand for the good were A high. B infinite. C low. D unitary. 18. The diagram shows the demand for chocolate.

What could cause the movement from point X to point Y? A a change in tastes B a fall in the price of chocolate C an increase in income D a successful advertising campaign for chocolate

19. The table shows the price of, demand for and supply of X per week.

What will be the effect if the government imposes a minimum price of $40 per tonne? A a fall in the price of X C a surplus of X B a shortage of X D a waiting-list for X 20. A bus company knows that demand for travel before 09 00 hours is inelastic and that after 09 00 hours it is elastic. How is the company certain to increase total revenue? A by increasing all fares B by increasing fares before 09 00 hours C by reducing all fares D by reducing fares before 09 00 hours 21. In many countries, extra staff are employed by the postal service and additional collections of post are made to clear the large amount of mail before holiday periods. What happens to the demand and supply curves for postal services during these periods?

22. Which of the following is true for any inelastic demand curve? A A price cut causes a fall in expenditure. B A price rise has no effect on demand. C A price rise has no effect on total profit. D The percentage change in demand is greater than the percentage change in price. 23. The graph shows the market for rice. It was in equilibrium at X. Later, there is a very good harvest of rice. What is the new equilibrium point?

24. The diagram shows the demand for and supply of a product. The original equilibrium is at X. Which point indicates the new equilibrium position if there is an increase in the price of a close substitute for the commodity while other things remain the same?

25. The diagram shows the demand for and supply of a firm's product. The original equilibrium is at X. The firm pays for a successful advertising campaign. What is the new equilibrium?

26. There are a fixed number of seats at a concert. Most of the audience would continue to attend even if the seat prices were increased. Which diagram represents this situation?

27. The major oil producers sometimes try to raise the price of oil. How would this be shown on a demand and supply diagram? A a movement along the demand curve to the right B a shift in the supply curve to the right C a shift in the demand curve to the left D a shift in the supply curve to the left

28. The graph shows the market for unskilled workers in a city. The original equilibrium is at X. What would be the new equilibrium if there was a migration of workers to the city?

29. The diagram shows the market for bicycles. The demand for bicycles increases and at the same time manufacturers are able to cut costs through new production methods.

According to the diagram, what would be the result of these changes?

30. If Sunshine Oranges were successfully advertised with the statement They help you live longer, which would be likely to occur?

Prepared by: Mohammed Aslam Economics Teacher aslamelm@yahoo.com K.A.E.C K.THULUSDHOO