1. In which of the changes to market conditions might we be certain that the market price will increase, but without knowing whether the quantity traded will increase or decrease? a) A cold winter increases the demand for energy, and the development of renewable energy supply increases the market supply. b) A hot summer increases the demand for ice cream, but an illness among dairy cows reduces the supply of milk for making ice cream. c) A renewed lockdown reduces the demand for the restaurant sector at the same time as increasing food prices reduces the market supply. d) Awareness of skin damage causes an increase in demand for sunscreen, at the same time as the cost of raw materials is falling
1. In which of the changes to market conditions might we be certain that the market price will increase, but without knowing whether the quantity traded will increase or decrease?
a) A cold winter increases the demand for energy, and the development of renewable energy supply increases the market supply.
b) A hot summer increases the demand for ice cream, but an illness among dairy cows reduces the supply of milk for making ice cream.
c) A renewed lockdown reduces the demand for the restaurant sector at the same time as increasing food prices reduces the market supply.
d) Awareness of skin damage causes an increase in demand for sunscreen, at the same time as the cost of raw materials is falling.
2) We would expect the demand for a brand of coffee beans to be more price elastic than the demand for bags of coffee beans because:
a) Not all consumers are able to grind coffee beans.
b) The market for the brand of coffee beans is much smaller than the market for all coffee beans.
c) There is a much higher degree of substitutability for a brand of coffee beans than for coffee beans as a product.
d) Consumers develop a taste for their preferred brand of coffee beans.
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