Supply, Demand, Equilibrium & Market Changes — Practice · Grade 12 Social Studies

Chapter: Economic Foundations & Market Decisions

What this practice covers

By the end of Supply, Demand, Equilibrium & Market Changes you should be able to:

8 questions, written answer, each with a worked explanation.

Vocabulary used: demand, supply, equilibrium, shortage, curve shift.

Problem 1

What does a 40-unit shortage at $2 mean in this model?
Answer and explanation

Quantity demanded is 60 units and supplied is 20, so demand exceeds supply by 40 units per week at that price. It does not mean 40 additional units already exist or establish how an actual market would allocate the available 20.

Problem 2

Why is market equilibrium different from every person’s needs being met?
Answer and explanation

Equilibrium equates market quantities under defined conditions. Demand includes purchasing capacity, so needs without that capacity may not appear as purchases. Distribution, access, and other effects require additional evidence and criteria.

Problem 3

Why is the supplied demand increase a shift rather than a movement along the old curve?
Answer and explanation

Quantities change at every given price while the supply schedule is unchanged. A movement along the original demand curve would follow a change in the product’s own price under its held-constant conditions.

Problem 4

What further questions follow a model prediction of shortage?
Answer and explanation

Investigate allocation, enforcement, contracts, later supply responses, quality, and other provision. The numerical gap describes plans at a price under assumptions; it does not establish every real consequence or one automatic policy judgment.

Problem 5

Invented weekly schedule: prices $1–$5; original demand 80,60,40,20,0; supply 0,20,40,60,80. Demand then rises by 40 at every price. Identify both equilibria and a shortage at the original $3 after the shift.
Answer and explanation

Originally, $3 and 40 units equate supply and demand. After the shift, demand at $3 is 80 while supply remains 40, a shortage of 40. At $4, both are 60, so the new listed equilibrium is $4 and 60 units. The prediction holds within this supplied model; it does not establish the cause of an actual market change or instant adjustment.

Find equality in the original schedule.

Add 40 to demand rows.

Compare quantities at $3 and $4.

Response criteria

  • Explain the relevant institution or economic concept accurately; show correct calculations where needed.
  • Connect supplied evidence and stated assumptions to an explained conclusion.
  • Compare feasible options and their effects on different people without stereotypes.
  • Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Problem 6

Does a product’s own price increase automatically shift its demand curve?
Answer and explanation

No. Under unchanged other conditions, it produces movement along the demand relationship. A shift requires a change in another relevant condition, such as preferences or income under a specified assumption.

Response criteria

  • Explain the relevant institution or economic concept accurately; show correct calculations where needed.
  • Connect supplied evidence and stated assumptions to an explained conclusion.
  • Compare feasible options and their effects on different people without stereotypes.
  • Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Problem 7

In the unit schedule at $4, demand is 20 and supply 60. Calculate excess supply and explain why it is not proof of waste in every real market.
Answer and explanation

The model surplus is 40 units per week at that price. Actual inventory, contracts, allocation, and adjustment are not supplied. The gap describes planned quantities under assumptions, not every physical outcome or welfare consequence.

Response criteria

  • Explain the relevant institution or economic concept accurately; show correct calculations where needed.
  • Connect supplied evidence and stated assumptions to an explained conclusion.
  • Compare feasible options and their effects on different people without stereotypes.
  • Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

Problem 8

An input cost rises while the product’s own price is held fixed. Does the model change concern movement along supply or a shift?
Answer and explanation

It can shift supply because another relevant production condition changed. A movement along the original curve concerns the product’s own price with other conditions held constant. Specify the input effect and assumptions rather than changing both concepts indiscriminately.

Response criteria

  • Explain the relevant institution or economic concept accurately; show correct calculations where needed.
  • Connect supplied evidence and stated assumptions to an explained conclusion.
  • Compare feasible options and their effects on different people without stereotypes.
  • Identify a limitation, tradeoff, uncertainty, or condition that qualifies the conclusion.

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