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S4 Economics Demand and Supply Practice Paper 1 | Law of Demand, Equilibrium, Surplus and Shortage: 10 Questions with Answers
S4 Economics Demand and Supply Practice Paper 1 | Law of Demand, Equilibrium, Surplus and Shortage: 10 Questions with Answers
Ten demand and supply questions moving from the law of demand to equilibrium price calculations, surplus and shortage, and shifts of the curve, with answers and a one-line explanation.
Direct answers This paper has 10 questions covering the law of demand, supply, the equilibrium price and shifts of the curve; suggested time is 18 minutes.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 |
| Suggested time | 18 minutes |
| Difficulty mix | Foundation 3 · Intermediate 4 · Challenge 2 · Error redo 1 |
| Chapter | S4 Economics: Demand and Supply |
| Level | S4 (DSE) |
02 Questions (10 items)
- FoundationOther factors being constant, what happens to the quantity demanded of a good when its price rises?
- FoundationWhy does a supply curve usually slope upwards to the right?
- FoundationUnder what condition does a market equilibrium price arise?
- IntermediateDemand Qd = 100 – 2P and supply Qs = 20 + 2P. Find the equilibrium price and quantity.
- IntermediateFollowing the previous question, if the market price is 25, does the market show a surplus or a shortage, and by how much?
- IntermediateFollowing the previous question, if the market price is 15, does the market show a surplus or a shortage, and by how much?
- IntermediateCitizens’ income rises and the good is a normal good. How do the demand curve and the equilibrium price change?
- ChallengeThe good’s own price falls. Is this a movement along the demand curve or a shift of the whole curve?
- ChallengeDemand and supply both increase. How do equilibrium quantity and equilibrium price change?
- Error redoWhat is wrong with the statement that a price rise increases demand?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | Quantity demanded falls. | This is the law of demand: price and quantity demanded move in opposite directions. |
| 2 | A higher price raises profit, so firms are willing to supply more. | Price is the incentive, so quantity supplied rises with it. |
| 3 | When quantity demanded equals quantity supplied. | There is neither surplus nor shortage, so price has no pressure to rise or fall. |
| 4 | P = 20, Q = 60. | Set Qd = Qs: 100 – 2P = 20 + 2P, so 4P = 80. |
| 5 | A surplus of 20 units. | Qd = 50 and Qs = 70, so excess supply is 20. |
| 6 | A shortage of 20 units. | Qd = 70 and Qs = 50, so excess demand is 20. |
| 7 | The demand curve shifts right, so both the equilibrium price and the equilibrium quantity rise. | Income is a non-price factor, so the whole curve shifts. |
| 8 | A movement down along the demand curve, to the right. | Only non-price factors shift the whole curve. |
| 9 | Equilibrium quantity rises, while the direction of the price change cannot be determined. | The two shifts push price in opposite directions, so the size of each matters. |
| 10 | It confuses demand with quantity demanded; a price rise reduces quantity demanded and the demand curve does not shift. | A price change alters only quantity demanded, while shifting demand needs a non-price factor. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
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