Price determination — Paper 1 · IGCSE Economics (9-1) 0987

6 The diagram shows market demand and supply curves. S1 P2 price P1 P3 D1 O Q2 Q3 Q1 Q4 Q5 quantity To what extent is the market in disequilibrium at price P3? A OQ1 – OQ2 B OQ1 – OQ3 C OQ2 – OQ4 D OQ3 – OQ5

1 marks

Answer: D

This question in 0987/11 May/June 2020

7 The diagram shows the market for information technology (IT) graduates. The original equilibrium was X. Later, more IT students graduated from university and greater use of artificial intelligence (AI) increased the demand for IT staff. What is the new equilibrium? D1 D D2 wage S1 B ($) A S X C S2 D O quantity of labour

1 marks

Answer: C

This question in 0987/12 May/June 2021

11 The diagram shows a market for labour. X is the original equilibrium. A trade union negotiates a minimum wage at W, and the government restricts the supply of immigrant labour. What is the new equilibrium? S2 wages S1 ($) B A C D W X D O quantity of labour

1 marks

Answer: B

This question in 0987/12 May/June 2021

7 An economy relies on potash to make fertiliser. A new deposit of potash is discovered. Which diagram shows this change in the market for potash? A B S1 S1 price price D2 D1 D1 D2 O O quantity quantity C D S2 S1 price price S1 S2 D1 D1 O O quantity quantity

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2021

10 The diagrams show the wage rates of cleaners (OWc) and nurses (OWn). cleaners nurses wage S wage S rate rate Wn M M Wc D D O employment O employment What is the result if a national minimum wage of OM is introduced? wage rate of wage rate of cleaners nurses A fall rise B no change fall C rise fall D rise no change

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2021

12 The diagram shows the imposition of a subsidy on a product supplied by a firm. S1 price S2 G H F J E K D O L M quantity Which area represents the total revenue of the firm including the subsidy? A EGHK B OEKM C OFJL D OGHM

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2021

6 The diagram shows the demand and supply for apples. 3.00 S $ per kilo 2.50 2.00 1.50 1.00 D 0.50 0 0 200 400 600 800 1000 tonnes (000) To what extent is the market for apples in disequilibrium at a price of $2.50 per kilo? A Demand exceeds supply by 200 000 tonnes. B Demand exceeds supply by 400 000 tonnes. C Supply exceeds demand by 200 000 tonnes. D Supply exceeds demand by 400 000 tonnes.

1 marks

Answer: D

This question in 0987/11 May/June 2022

8 The table shows the demand and supply schedules for rice. The current price is $2.00 per kilo. quantity demanded quantity supplied price per kilo $ (million tonnes) (million tonnes) 2.50 5 30 2.00 10 25 1.50 20 20 1.00 30 15 0.50 40 10 What will happen if the price is reduced to $1.00 per kilo? A The demand schedule will shift to the left. B The market will move from shortage to surplus. C The market will move from surplus to shortage. D The supply schedule will shift to the right.

1 marks

Answer: C

This question in 0987/12 May/June 2022

9 The price of a good increases. What could cause this? A The cost of raw materials falls. B The incomes of consumers rise. C The price of a complement rises. D The price of a substitute falls.

1 marks

Answer: B

This question in 0987/12 May/June 2023

6 The markets of four products are all in equilibrium. The table gives the value of the price elasticity of supply (PES) for each product. The demand for each product shifts to the right by 5000 units at all prices. Which product will have the largest price increase? price elasticity of supply A 0 B 0.6 C 1.0 D 2.5

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2023

9 Good weather results in an increase in the demand for tomatoes. It also increases the supply of tomatoes. What must be a result of this? A The price of tomatoes will fall. B The price of tomatoes will rise. C The quantity of tomatoes traded will fall. D The quantity of tomatoes traded will rise.

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2023

10 What causes a change in the price of a product in a free market economy? A changes in demand and supply conditions B changes in external costs and external benefits C changes in government decisions D changes in the quantity of public goods

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2023

7 Which statement describes a market in disequilibrium? A Excess demand results from a government maximum price below the equilibrium price. B The point where the demand and supply curves cross. C Price changes cause further changes in both demand and supply. D The quantity demanded by consumers equals the quantity supplied by producers.

1 marks

Answer: A

This question in 0987/12 May/June 2024

9 Which government measure is most likely to cause a fall both in price and in quantity traded? A indirect tax B maximum price C minimum price D subsidy

1 marks

Answer: B

This question in 0987/12 May/June 2024

19 The diagram shows the impact of a tax introduced on a product. S2 price S1 E P2 P1 F H G D O Q2 Q1 quantity Which area represents the amount of tax paid by the consumer? A HP1FG B HP2EG C OP2EQ2 D P1P2EF

1 marks

Answer: D

This question in 0987/12 May/June 2024

4 A period of bad weather leads to a failure of the rice crop. What is the effect on the market for rice? A a shortage of rice and a fall in its price B a shortage of rice and a rise in its price C a surplus of rice and a fall in its price D a surplus of rice and a rise in its price

1 marks

Answer: B

This question in 0987/12 Oct/Nov 2024

7 Which changes would move the equilibrium in the diagram from point X to point Z? S Z price X D O quantity A a decrease in demand with a decrease in supply B a decrease in demand with an increase in supply C an increase in demand with a decrease in supply D an increase in demand with an increase in supply

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2024

11 How would a change in the demand for labour affect the labour market in an occupation? change in demand change in the change in quantity for labour equilibrium wage of labour supplied A decrease decrease extend B decrease increase contract C increase decrease contract D increase increase extend

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2024

5 Good weather results in an increase in the demand for and supply of peaches. How will this affect the price and quantity traded in the market for peaches? price of quantity of peaches peaches traded A fall fall B rise rise C rise uncertain D uncertain rise

1 marks

Answer: D

This question in 0987/11 May/June 2025

5 The table shows the quantity of coffee demanded per day and the quantity supplied per day. price ($) per kilo demand (kilos) supply (kilos) 12 16 26 11 18 23 10 20 20 9 22 17 8 24 14 7 26 11 At the equilibrium price, what will be the total expenditure on coffee? A $10 B $20 C $200 D $400

1 marks

Answer: C

This question in 0987/12 May/June 2025