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Supply curves

Question 1

Cheeseburgers

Plot the original supply of cheeseburgers per week for a small takeaway restaurant, and the new supply curve following a rise in the cost of cheese.

PRICE (£) ORIGIAL QUANTITY SUPPLIED NEW QUANTITY SUPPLIED
5.00 400 360
4.50 360 320
4.00 320 280
3.50 280 240
3.00 240 200
2.50 200 160
2.00 160 120
1.50 120 80

Question 2

In the following cases, draw an original supply curve (S) and a new supply curve to the left or right, and label it S1.

  1. The supply of Economics textbooks, following a fall in the cost of printing.

  2. Ice cream, following a rise in the cost of milk.

  3. DVD Players, following the introduction of new technology by DVD manufacturers.

  4. Underground travel, following a strike by Tube drivers.

  5. The world supply of oil, following the discovery and refining of large oil reserves in Russia.

  6. The supply of wine from France, following the imposition of a tax on imported wine.

  7. The supply of bread in the UK, following the granting of a subsidy by the government to bread producers.

Question 3

The market for English apples

The price of English apples is likely to rise in the coming months following the unusually cold and wet conditions during late spring and early summer, as reported by the Sunday telegraph (16/09/2012). Conditions continued to deteriorate following heavy rainfall in late August. The result is that yields are some 20% down on previous years for many English varieties. The impact has not been even, with the hardest hit apples growers suffering a 90% reduction in crops compared with average crop sizes.  Some supermarkets have already raised the price of apples to around £1 per pound (lb) and many are switching to lower priced imports. Manufacturers of tarts and pastries are likely to pass on the rising cost of apple fillings, although the current recession may act as a constraint on the extent to which this will happen.

 (Adapted from The Sunday Telegraph).
  1. Using demand and supply analysis, explain how the poor weather conditions are likely to affect the market for English apples. (4)

  2. Why might food manufacturers not pass on the rising cost of fillings to supermarkets? (4)

  3. Using a diagram, assess the likely effect of a fall in incomes on the market for fruit. (10)


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