12 marks
Explain, using information from the extract, whether the market for driverless cars is expected to be in equilibrium in 2030.
Refer to the source material in your answers
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Price Determination (CIE IGCSE Economics)
Topic Questions
22 marks
In February 2017, Europe experienced a shortage of fresh vegetables due to bad weather. For a period of time, the markets for a number of vegetables, including broccoli and lettuces, were not in equilibrium. The price of food tends to fluctuate more than the price of manufactured goods and services. These fluctuations influence the rate of inflation.
When is a market in equilibrium?
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3
2 marks
2 marksThere was a global surplus of steel in 2017 which means there is excess supply. In mid-2017, the US government considered imposing tariffs on steel imports to protect its declining steel industry. Cheap imports from other countries were reducing employment in the US steel industry. The pattern of US employment was also being affected by improvements in education
Define excess supply
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42 marks
2 marksMore than 80% of Qatar’s population are immigrants. Net immigration has helped to meet the country’s demand for labour. As well as a shortage of workers, the country has a shortage of drinking water due to excess demand. The government has run public campaigns to stop people using their free supply of drinking water to fill their swimming pools and water their gardens. In 2016, the government increased its spending to increase the country’s economic growth rate.
Define excess demand
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52 marks
2 marksThe population of Hungary is the most obese in Europe. Hungarians eat fewer vegetables than most Europeans and more food types that may be considered to be demerit goods. In doing this they are exerting their consumer sovereignty. In 2017, the Hungarian government introduced a tax on unhealthy food, known as the chips tax. The tax has had some success in moving demand to healthier foods. Some economists suggest that governments should use price controls as well as taxes to influence the food market.
Define consumer sovereignty
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18 marks
8 marksThere was a global surplus of steel in 2017. In mid-2017, the US government considered imposing tariffs on steel imports to protect its declining steel industry. Cheap imports from other countries were reducing employment in the US steel industry. The pattern of US employment was also being affected by improvements in education
Discuss whether excess demand will eventually lead to market equilibrium
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28 marks
8 marksIn Tunisia, resource allocation decisions are made by both the public sector and private sector. Tunisia’s GDP increased from 2014 to 2018 but its households saved less. Income levels can be affected by changes in trade union activity and the foreign exchange rate. From 2014 to 2018, Tunisia experienced a number of strikes organised by its largest trade union, the Tunisian General Labour Union. There was also a significant fall in its foreign exchange rate.
Discuss whether market equilibrium is the most effective way to satisfy both buyers and sellers
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14 marks
Analyse the evidence that shows the market for flowers is sometimes in disequilibrium.
Refer to the source material in your answers
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24 marks
There was a global surplus of steel in 2017. In mid-2017, the US government considered imposing tariffs on steel imports to protect its declining steel industry. Cheap imports from other countries were reducing employment in the US steel industry. The pattern of US employment was also being affected by improvements in education
Explain how market forces will eliminate a surplus and a shortage
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34 marks
More than 80% of Qatar’s population are immigrants. Net immigration has helped to meet the country’s demand for labour. As well as a shortage of workers, the country has a shortage of drinking water. The government has run public campaigns to stop people using their free supply of drinking water to fill their swimming pools and water their gardens. In 2016, the government increased its spending to increase the country’s economic growth rate.
Explain how market forces would respond to a shortage of drinking water.
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44 marks
4 marksMore than 80% of Qatar’s population are immigrants. Net immigration has helped to meet the country’s demand for labour. As well as a shortage of workers, the country has a shortage of drinking water. The government has run public campaigns to stop people using their free supply of drinking water to fill their swimming pools and water their gardens. In 2016, the government increased its spending to increase the country’s economic growth rate.
Explain the difference between excess demand and excess supply
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