From 21

1. What is meant by the inverse relationship between the

price and the quantity demanded for a product? Use

this case as an example in your answer.

2. In addition to the price, what two factors might affect

the quantity demanded for holidays in the Seychelles?

The demand for holidays in the Seychelles may be

affected by:

3. What would you expect to happen to the quantity

demanded for holidays in the Seychelles during a

recession? Explain your answer.

4.A rise in the price of petrol is likely to reduce the

demand for cars.

5.Describe the main factor affecting supply in this case.

The main factor affecting supply in this case is the cost of

production

6. Calculate the percentage increase in the price of

imported fish feed per 15 kilogram bag.

The price of imported fish feed has increased from NGN

6,000 to NGN 11,000 for a 15 kilogram bag. The percentage

increase in price is given by:

NGN 11,000 NGN 6,000 = 5,000 ______

6,000 100 = 83.3 per cent

7. Why do you think the quantity supplied falls when

production costs rise?

8.Why has the price of lithium increased? Use a supply

and demand diagram in your explanation.

9. Describe one possible reason for your answer in (1).

It could be argued that it is difficult to cut demand for

something as important as electricity.

10. Do you think demand for Chinese take away food is

sensitive to price changes?