Winter Exam

Grade 10 iGCSE Economics Name:_____________________
“End-of-term Exam”
Winter
Multiple Choice [1 mark each]

– select the letter that best answers each question
1. The diagram shows a shift in the supply curve for New Zealand’s airlines from S1 to S2.
What is the cause of this shift?

A) a decrease in the costs of New Zealand’s airlines
B) a decrease in the number of people wanting to fly to New Zealand
C) an increase in the price of train and bus travel in New Zealand
D) an increase in the tax on air travel in New Zealand
2. The diagram shows the market for a product.
Which statement about the points marked on the diagram is correct?

A) The distance from W to X shows a shortage of the product.
B) The distance from Z to Y shows a surplus of the product.
C) The movement from W to Y shows a fall in the quantity demanded of the product.
D) The movement from X to Z shows a fall in the quantity supplied of the product.
3. 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?
4. What is meant by equilibrium in a market?
A) where products offered for sale equal consumer demand
B) where profit is at the expected level
C) where the quantity of inputs equals the quantity of output
D) where total costs equal total revenue
5. The diagram shows the supply and demand for a product.
Suppliers have decided to produce 10 000 units and charge a price of $6.
What is the result of this decision in the short run?
A A stable equilibrium price will be achieved.
B Suppliers will be left with unsold stock.
C The equilibrium market price will increase.
D There will be excess demand at the price of $6.
6. In the diagram, suppliers have set the price of a product at PS. Economic theory predicts that the equilibrium
price of the product will rise to PE.
What is the reason for this movement in price?

A) Demand for the product will increase.
B) No more of the product can be supplied.
C) Some consumers are willing to pay higher prices.
D) Suppliers are facing rising costs.
7. The diagram shows the demand and supply for apples.

(continued.) 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.
8. In 2018 the UK government introduced a tax on the production of sugary drinks. How would this affect the
market for sugary drinks as shown on a demand and supply diagram?
9. In an African country with large areas of tropical desert the price elasticity of demand for salt is highly
inelastic. This will result in greater consumer expenditure on salt when price changes from P1 to P2. Which
diagram illustrates this situation?
10. The table shows four people’s demand for t-shirts at two prices.
Who has the most elastic demand for t-shirts when the price rises from $10 to $15?
A) Elsa B) George C) Hamid D) Shara
Short Response
– write the answer to the following questions
1. a) Draw demand and supply curves on one diagram and illustrate the equilibrium price and quantity. Label
appropriately. [3 marks]
b) On the diagram above, draw in what happens if the government sets a maximum price to make the good
affordable to people on low incomes. Label appropriately. [2 marks]
2. In each case below, illustrate the changes on the market for Ghanaian football shirts, using a demand and
supply diagram. Label appropriately.
A) A fall in incomes in Ghana and neighbouring countries. [3 marks]
B) A tax being placed on Ghanaian football shirts. [3 marks]
3. Explain two determinants of PED. [4 marks]

** Need to explain how PED is determined by the factor. Eg. the more a good is ~~~, the more elastic/inelastic.
4. The price of bread rose by 5% and the quantity demanded fell by 4%. What was the price elasticity of demand
for bread? [1 mark]
5. The table shows the demand and supply for spices in a market in Africa.
When the price rises from US$20 to US$30 per kg, what is the price elasticity of demand (PED) for spices? [1 mark]
6. Draw diagrams that show: [5 marks]

1) perfectly inelastic demand 2) inelastic demand
3) perfectly elastic demand 4) elastic demand
5) unitary elastic demand
Extra Credit
Q. In a competitive market for good X, use the demand and supply model to draw changes in demand or supply
making clear how the initial market disequilibrium is created, and how the price will change to clear the market and
restore market equilibrium. Label the changes appropriately. – use the back page or grid paper to answer this one.
[3 marks]
A) Price of substitute good Z increases. B) The price of related good A (joint supply) decreases.

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Grade 10 iGCSE Economics Name:_____________________

Multiple Choice [1 mark each]

What is the cause of this shift?

2. The diagram shows the market for a product.

Which statement about the points marked on the diagram is correct?

5. The diagram shows the supply and demand for a product.

What is the reason for this movement in price?

7. The diagram shows the demand and supply for apples.

A) A fall in incomes in Ghana and neighbouring countries. [3 marks]

B) A tax being placed on Ghanaian football shirts. [3 marks]

3. Explain two determinants of PED. [4 marks]

6. Draw diagrams that show: [5 marks]

3) perfectly elastic demand 4) elastic demand

5) unitary elastic demand

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