中文（繁體）
中文（简体）
English
S4 Economics Demand and Supply Practice Paper 2 | Price Ceiling, Elasticity and Taxation: 10 Questions with Answers
S4 Economics Demand and Supply Practice Paper 2 | Price Ceiling, Elasticity and Taxation: 10 Questions with Answers
Ten demand and supply questions in a second paper, moving from the reasons for the slope of the curve and price ceilings to equilibrium calculations, price elasticity of demand and the effects of a tax, with answers and a one-line explanation.
Direct answers This paper has 10 questions covering price ceilings, equilibrium calculations, price elasticity of demand and the effect of a tax; suggested time is 20 minutes.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 |
| Suggested time | 20 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)
- FoundationWhat are the main reasons why a demand curve slopes downwards to the right?
- FoundationProduction costs fall while the price stays unchanged. How does the supply curve move?
- FoundationThe government sets a maximum price below the equilibrium price. What happens in the market?
- IntermediateDemand Qd = 200 – 4P and supply Qs = 40 + 6P. Find the equilibrium price and quantity.
- IntermediateFollowing the previous question, if the market price is 20, does the market show a surplus or a shortage, and by how much?
- IntermediateFollowing the previous question, if the market price is 12, does the market show a surplus or a shortage, and by how much?
- IntermediateFollowing the previous question, price rises from 16 to 20. Calculate the price elasticity of demand using the starting-point method.
- ChallengeThe government imposes a per-unit specific tax. How do the supply curve and the equilibrium change?
- ChallengeDemand and supply both decrease. How do equilibrium quantity and equilibrium price change?
- Error redoWhat is wrong with the claim that when price is above the equilibrium price the market has a shortage?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | The substitution effect, the income effect and diminishing marginal utility. | When price falls, substitution and purchasing power both raise the quantity bought. |
| 2 | The whole supply curve shifts right, so quantity supplied rises at the same price. | Cost is a non-price factor, so the whole curve shifts. |
| 3 | A shortage appears, possibly along with queuing, rationing or a black market. | Quantity demanded exceeds quantity supplied, and price cannot adjust upwards. |
| 4 | P = 16, Q = 136. | Set Qd = Qs: 200 – 4P = 40 + 6P, so 10P = 160. |
| 5 | A surplus of 40 units. | Qd = 120 and Qs = 160, so excess supply is 40. |
| 6 | A shortage of 40 units. | Qd = 152 and Qs = 112, so excess demand is 40. |
| 7 | About 0.47, which is inelastic. | Quantity demanded falls 11.8% while price rises 25%, and dividing gives 0.47. |
| 8 | The supply curve shifts left, that is upwards, so the equilibrium price rises and the equilibrium quantity falls. | A tax is equivalent to a rise in cost, and buyers and sellers share the tax burden. |
| 9 | Equilibrium quantity falls, 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 | A price above equilibrium means excess supply, so a surplus appears; a shortage appears when the price is below equilibrium. | Remember the direction: a high price leaves goods unsold, a low price leaves buyers short. |
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.
Get more free S4 Economics practice papersTutor Registration →
Questions and answers are written originally by the TutorZone team and are not taken from any school, publisher or examination authority paper. Every value is checked by computer.
