2.4 The interaction of demand and supply

a) Explain three reasons, associated with costs of production, why the supply curve for a particular market may shift to the right and consider the extent to which government microeconomic policy may also shift the supply curve for a particular market to the right. [8]

Explain the determinants of supply for an agricultural product, such as rice, and consider which of these determinants is likely to be of the greatest significance at the present time. [8]

With the help of diagram(s), explain the difference between a cause of movement along the demand curve and a shift in the demand curve. Consider the impact of a change in demand of one good due to the change in price of another good. [8]

From 2030, most new car production in the United Kingdom (UK) will be of electric cars.

a) Excluding the price of electric cars, explain the determinants of demand for electric cars and consider which of these determinants is likely to be of greatest significance at the present time. [8]

a) Explain how equilibrium position is set in the market and which factors are most important to affect it. [8]

a) Explain the functions of price in resource allocation and consider the importance of these functions in relation to the potential effectiveness of a market economy. [8]

a) Using diagrams, explain what might cause a market to be in disequilibrium, and how market forces would lead to equilibrium being restored. [8]

There is increasing concern about the impact of foreign holidays on the environment of the host country.

a) Explain, with the aid of a demand and supply diagram, two factors that might cause an increase in the demand for foreign holidays. [8]

a) Explain what determines the change in equilibrium price and equilibrium quantity of a good when there is a rise in incomes in an economy. [8]