Price determination & market equilibrium

Explain how the data in Extract A (Figure 1 and Figure 2) show that the rice export ban by India in 2022 is likely to have had a significant impact on the world price of rice.

Extract B (line 19) states: ‘In Nigeria, the demand for rice is very price inelastic’.

With the help of a diagram, explain how the Indian export ban is likely to have affected the market for rice in Nigeria.

Extract C (lines 6–7) states: ‘An alternative would be to impose a maximum price for consumers, as both Sri Lanka and the Philippines have done’.

Using the data and your knowledge of economics, evaluate the view that imposing a maximum price for rice is the best way for a rice-importing nation, such as Nigeria, to ensure the affordability of a basic food for its citizens.

Figure 4 shows a market for houses to rent. The current average monthly rent in the

Why is this market in disequilibrium at an average monthly rent of R₁?

Explain how the data in Extract A (Figure 1 and Table 1) show that the supply of university and private rental accommodation has failed to match the increase in student numbers between 2015 and 2021.

Extract B (lines 3–4) states that ‘Universities have expanded the number of places on offer to students, but the supply of student accommodation is highly inelastic’.

With the help of a diagram, explain the impact of the increase in the number of students attending university on the market for student accommodation.

Table 3 shows the demand for and supply of oranges at a range of prices between 10 pence and 30 pence.

As a result of an increase in consumers’ incomes, the demand for oranges increases by 25% at each of the prices shown in Table 3.

After the rise in incomes:

With the help of a diagram, explain how cheaper transportation and a construction boom in East Asia have led to growth in the market for sand.

travel.

Explain the likely causes of the main changes in house prices that have taken place between 2007 and 2017.

At the initial market equilibrium, the income elasticity of demand for fresh chickens is +1.5, and the price elasticity of supply is +1.0. Then there is a 5% increase in consumers’ income.

Which one of the following combinations, A, B, C or D, is most likely to show the changes in the market equilibrium price and quantity?

The diagram below shows the demand curves (D₁ and D₂) and the supply curve (S)

The increase in market demand from D₁ to D₂ results in a new market equilibrium at E₂. The market mechanism that leads to the establishment of the new equilibrium is based on