Demand and Supply Curves Self Check

Published

September 11, 2026

How to use this pack

Attempt each section without notes, writing tour answers down. Use fully labelled diagrams whenever a question asks you to explain or analyse a shift in demand or supply.

TipDiagram checklist

For every demand or supply diagram, include a vertical axis labelled Price, a horizontal axis labelled Quantity, labelled curves such as \(D_1\), \(D_2\), \(S_1\) and \(S_2\), arrows showing shifts, and clearly marked equilibrium points where relevant.

A. Rapid recall

Answer in one or two precise sentences.

  1. Define a market.
  2. Define the price mechanism.
  3. Define demand.
  4. Explain the difference between notional demand and effective demand.
  5. What does ceteris paribus mean?
  6. Define supply.
  7. What is meant by an individual demand curve?
  8. What is meant by a market demand curve?
  9. What is meant by an individual supply curve?
  10. What is meant by a market supply curve?
  11. Define quantity demanded.
  12. Define quantity supplied.
  13. What is a demand schedule?
  14. What is a supply schedule?
  15. Define a normal good.
  16. Define an inferior good.
  17. Define a substitute.
  18. Define a complement.
  19. What is an extension of demand?
  20. What is a contraction of demand?
  21. What is an extension of supply?
  22. What is a contraction of supply?
  23. What does a rightward shift of a demand curve show?
  24. What does a leftward shift of a supply curve show?
  25. Define an indirect tax and a subsidy.

B. Identify the change

For each event, state whether it causes:

  • an extension or contraction of demand;
  • an extension or contraction of supply;
  • a rightward or leftward shift of demand;
  • a rightward or leftward shift of supply; or
  • no direct effect on the stated market curve.

Give one reason for each answer.

  1. The price of cinema tickets falls.
  2. Household incomes increase, and restaurant meals are normal goods.
  3. The price of petrol rises; consider the market for car journeys.
  4. The price of Pepsi rises; consider demand for Coca-Cola.
  5. A popular influencer recommends a particular brand of trainers.
  6. The wage rate paid to workers producing bicycles rises.
  7. A new machine increases the productivity of coffee harvesting.
  8. The government introduces a new indirect tax on sugary drinks.
  9. The government increases the subsidy paid to solar-panel producers.
  10. Severe drought reduces the wheat harvest.
  11. The price of wheat rises, with all other factors affecting wheat supply unchanged.
  12. The price of laptop computers falls, with all other factors affecting laptop demand unchanged.
  13. The price of public transport rises; consider the demand for taxi journeys.
  14. Consumers begin to prefer reusable water bottles to bottled water.
  15. New firms enter the market for online tutoring.
  16. The price of a competing brand rises; consider the supply of the original brand.
  17. A recession reduces household income; consider demand for low-cost instant noodles, assumed to be inferior goods.
  18. Flooding disrupts transport routes used to distribute fresh vegetables.

C. Demand schedules and calculations

Question 1: demand schedule

The table shows weekly market demand for wireless headphones.

Price per pair ($) Quantity demanded per week
80 200
70 300
60 400
50 500
40 600
30 700
  1. Plot the demand curve, with price on the vertical axis and quantity on the horizontal axis.
  2. Describe the relationship between price and quantity demanded.
  3. Estimate the quantity demanded when price is $55.
  4. Estimate the price at which quantity demanded is 450 pairs.
  5. Calculate total consumer expenditure at each listed price.
  6. At which listed price is total consumer expenditure greatest?
  7. Explain why the answers to parts 3 and 4 are estimates.

Question 2: supply schedule

The table shows weekly market supply for wireless headphones.

Price per pair ($) Quantity supplied per week
30 150
40 250
50 350
60 450
70 550
80 650
  1. Plot the supply curve on a separate diagram.
  2. Describe the relationship between price and quantity supplied.
  3. Estimate quantity supplied when price is $55.
  4. Estimate the price at which quantity supplied is 500 pairs.
  5. Explain why firms may be more willing and able to supply at higher prices.

Question 3: market equilibrium

Use the two schedules above.

  1. Identify the equilibrium price and equilibrium quantity.
  2. At a price of $40, calculate the excess demand or excess supply.
  3. At a price of $70, calculate the excess demand or excess supply.
  4. Explain how the price mechanism is likely to respond to each disequilibrium in parts 2 and 3.
  5. Calculate total consumer expenditure and total revenue at equilibrium.

D. Diagram practice

Draw a separate, fully labelled diagram for each situation. Write two to four sentences explaining the causal chain.

  1. Demand for coffee rises after a favourable change in consumer tastes.
  2. Demand for bus travel falls after the price of petrol falls.
  3. Demand for branded clothing rises after an increase in income, assuming branded clothing is a normal good.
  4. Supply of vegetables falls after flooding damages crops.
  5. Supply of manufactured furniture rises after a fall in timber prices.
  6. Supply of electric vehicles rises after an increase in the producer subsidy.
  7. The price of tablets falls. Show the effect on quantity demanded, not demand.
  8. The price of tablets rises. Show the effect on quantity supplied, not supply.
  9. Demand for tea rises after the price of coffee rises.
  10. Supply of domestic airline flights falls after jet-fuel prices rise.

E. Explain the economics

Answer using clear chains of reasoning. Use diagrams where indicated.

  1. Explain why demand must be both willing and able to buy.
  2. Explain why the time period is part of the definition of demand and supply.
  3. Explain how market demand is derived from individual demand.
  4. Explain why a good can be normal for one consumer and inferior for another.
  5. Explain why the strength of the relationship between two substitutes can vary.
  6. Explain why a rise in the price of petrol is likely to reduce demand for non-essential car journeys.
  7. Explain why an increase in worker productivity can increase supply.
  8. Explain why an indirect tax is likely to decrease supply.
  9. Explain why a subsidy is likely to increase supply.
  10. Explain why a fall in a product’s own price does not necessarily mean demand has increased.
  11. Explain why a movement along a supply curve is not the same as a shift of the supply curve.
  12. Using a demand and supply diagram, explain how a fall in the cost of raw materials affects the market for a manufactured good.

F. Multiple-choice practice

Choose the best answer. Do not check the solution until you have completed all questions.

  1. Which condition is required for effective demand? A. A consumer sees an advertisement. B. A consumer wants a product and has the purchasing power to buy it. C. A firm is able to produce a product. D. A product is available in a physical market.

  2. A market demand curve shows the quantity: A. one consumer will buy at different prices. B. one firm will sell at different prices. C. all consumers in the market will buy at different prices. D. all firms in the market will sell at different prices.

  3. A fall in the price of a product, ceteris paribus, causes: A. an increase in demand. B. an extension of demand. C. a contraction of demand. D. a leftward shift of the demand curve.

  4. Which change is most likely to increase demand for a normal good? A. A fall in consumer income. B. A rise in production costs. C. A rise in consumer income. D. A rise in indirect tax on producers.

  5. Tea and coffee are substitutes. What is the most likely effect of a rise in the price of coffee? A. Demand for tea shifts right. B. Demand for tea shifts left. C. Supply of tea shifts right. D. There is a contraction of demand for tea.

  6. Printers and printer ink are complements. What is the most likely effect of a rise in the price of printers? A. Demand for ink shifts right. B. Demand for ink shifts left. C. Supply of ink shifts right. D. There is an extension of demand for ink.

  7. Which change would move a supply curve to the right? A. An increase in wages. B. An increase in indirect tax. C. A fall in productivity. D. A fall in energy costs.

  8. Which event causes a movement along the supply curve for good X? A. The price of good X rises. B. The cost of producing X rises. C. A subsidy for producers of X is removed. D. New firms leave the industry producing X.

  9. A severe frost destroys part of the grape harvest. This is most likely to cause: A. a rightward shift of grape demand. B. a leftward shift of grape supply. C. an extension of grape supply. D. a contraction of grape demand.

  10. Which statement correctly distinguishes demand from quantity demanded? A. Demand changes only when price changes. B. Quantity demanded changes only when income changes. C. Demand is the whole relationship between price and planned purchases. D. Quantity demanded is the sum of all consumers’ purchases at every price.

  11. At a price below equilibrium, quantity demanded exceeds quantity supplied. The market has: A. excess demand. B. excess supply. C. an extension of supply. D. a contraction of demand.

  12. A subsidy paid to producers is most likely to: A. increase production costs and shift supply left. B. decrease effective production costs and shift supply right. C. increase demand and shift demand right. D. cause an extension of supply along the same curve.

G. Structured questions

Question 1: Smartphones [8 marks]

Smartphones are normal goods. A rise in household incomes occurs at the same time as a fall in the price of mobile data plans, which are a complement to smartphone use.

  1. Define a normal good. [2]
  2. Using a demand diagram, explain the effect of higher incomes on demand for smartphones. [3]
  3. Analyse the combined effect of the two changes on demand for smartphones. [3]

Question 2: Rice production [8 marks]

Rice farmers experience a large rise in fertiliser prices. At the same time, the government removes a subsidy previously paid to rice producers.

  1. State two determinants of supply other than the product’s own price. [2]
  2. Using a supply diagram, explain the effect of higher fertiliser prices on supply of rice. [3]
  3. Analyse the combined impact of the two changes on supply of rice. [3]

Question 3: Ride-hailing services [10 marks]

The price of bus travel rises. At the same time, an increase in the number of licensed ride-hailing drivers reduces the cost of providing ride-hailing services.

  1. Explain why bus travel and ride-hailing services may be substitutes. [2]
  2. Using a demand and supply diagram, analyse the effect of the rise in bus fares on the ride-hailing market. [4]
  3. Analyse the effect of the increase in licensed drivers on the supply of ride-hailing services. [4]

Question 4: Coffee market [10 marks]

Coffee growers introduce harvesting technology that substantially increases labour productivity. However, a health report makes some consumers switch from coffee to other drinks.

  1. Explain how higher labour productivity affects costs of production. [2]
  2. Using demand and supply analysis, explain the effect of the technology on the supply of coffee. [3]
  3. Analyse the effect of the health report on demand for coffee. [3]
  4. State why the final equilibrium price may be uncertain when both changes occur together. [2]

H. Extended-response practice

In each answer, define relevant terms, use accurate diagrams, develop causal chains, and reach a supported judgement where the command word requires one.

Question 1 [12 marks]

Discuss whether an increase in consumer income will always increase demand for a product.

Question 2 [12 marks]

Analyse the likely effects on the market for electric vehicles when the price of petrol rises and the cost of producing electric vehicle batteries falls.

Question 3 [12 marks]

Discuss whether a government subsidy to producers will always benefit consumers.

Question 4 [12 marks]

Analyse how technological change may affect the supply of agricultural products. Consider possible limitations of the analysis.

Question 5 [12 marks]

Discuss the usefulness and limitations of demand and supply curves in explaining changes in a real-world market.

Question bank

  1. Which change would cause a movement along the demand curve for good X? Explain why. [2]
  2. A government removes a specific indirect tax on a good. Analyse the likely effect on supply and market equilibrium. [4]
  3. Beef and leather are in joint supply. Explain one possible effect on the market for leather if demand for beef rises. [3]
  4. Explain why a significant increase in labour productivity shifts the supply curve for a manufactured product. [3]
  5. A severe frost affects coffee-growing regions while successful advertising increases demand for tea, a substitute for coffee. Analyse the effects on the coffee market and identify any uncertain outcome. [6]
  6. Electric vehicles are substitutes for petrol-powered cars. Battery costs fall and petrol prices rise. Using a diagram, analyse the effects on the equilibrium price and quantity of electric vehicles. [6]
  7. A period of unusually hot weather coincides with a reduction in raw-material costs for air-conditioning units. Explain the shifts in demand and supply, then discuss the final effect on equilibrium price and quantity. [7]
  8. Explain the rationing and signalling functions of the price mechanism when an unexpected rise in demand creates a shortage. [4]