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Demand · Paper 1 — Free Economics SL Practice Questions
1FoundationSAQ-SLaw of demand and its determinants10 marksPaper 1~15 min
The market for fresh strawberries in a small town experiences a significant increase in the number of health-conscious consumers. The market was initially in equilibrium.
(a)
Define the Law of Demand. [2 marks]
(b)
Draw a correctly labelled demand supply for the strawberry market, showing the effect of the increase in health-conscious consumers. [2 marks]
(c)
Using your , explain the effect of this change in consumer preferences on the equilibrium price and quantity of strawberries. [2 marks]
(d)
A local strawberry farmer argues that the change in consumer preferences will permanently increase revenue. Discuss whether this claim is likely to be correct. [4 marks]
Solutions
2MasterySAQ-SLaw of demand and its determinants4 marksPaper 1~6 min
Norway imposes a higher purchase tax on petrol cars. At the same time, consumer incomes in Norway rise. EVs are a normal good; petrol cars are a substitute for EVs.
(a)
Draw a fully labelled demand supply for the EV market in Norway, showing the initial equilibrium at price and quantity , and the new equilibrium at price and quantity . [2 marks]
(b)
Using the , explain why both the higher purchase tax on petrol cars and the rise in consumer incomes cause the demand curve for EVs to shift to the right, and state the effect on equilibrium price and quantity. [2 marks]
Solutions
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