Which of the following things would cause an increase in the supply of coffee?

Topic pack - Microeconomics - introduction
Terms and definitions
Games and activities
Section 2.1 Markets - notes
Section 2.1 Markets - questions
1. Market structures - self-test questions
2. Market structure - short answer
3. Markets - essay
4. Price as a signal - short answer
5. Demand - self-test questions
6. Demand - short answer
7. Supply - short answer
8. Demand and supply - short answer
9. Markets and prices - self-test questions
10. Demand and supply - data response
11. Price controls - short answer
12. Agricultural markets - essay
Section 2.1 Markets - in the news
Section 2.1 Markets - simulations and activities
Section 2.2 Elasticities - notes
Section 2.2 Elasticities - questions
Elasticities - in the news
Section 2.2 Elasticities - simulations and activities
Section 2.3 Theory of the firm - notes (HL only)
Section 2.3 Theory of the firm - questions (HL only)
Section 2.3 Theory of the firm - in the news (HL Only)
Section 2.3 Theory of the firm - simulations and activities (HL only)
Section 2.4 Market failure - notes
Section 2.4 Market failure - questions
Section 2.4 Market failure - in the news
Section 2.4 Market failure - simulations and activities
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What would cause an increase in the supply of coffee?
Which of the following would cause an increase in the quantity demanded of coffee?
What is the effect of an increase in the price of coffee?
What factors influence the demand for coffee?

Market changes

The diagram below shows the market for 3G mobile phones. Which of the following events might have caused the shift in the demand curve?

	a)	3G phone suppliers take advantage of economies of scale
	b)	An increase in advertising expenditure by phone companies
	c)	An increase in interest rates
	d)	The entry into the market of a major new 3G supplier
Please select an answerNo, that's not right. The economies of scale would reduce costs and therefore shift the supply curve to the right.Yes, that's correct. An increase in advertising may shift the demand curve to the right.No, that's not right. An increase in interest rates will reduce disposable income and therefore shift the demand curve to the left.No, that's not right. This will have the effect of shifting the supply curve to the right.

Market changes

The diagram below shows the market for coffee. Which of the following events might have caused the shift in the supply curve?

	a)	Starbucks expand significantly in Eastern European countries
	b)	Coffee substitutes like green tea become more popular
	c)	An increase in income
	d)	Subsidies are offered to coffee producers in developing countries
Please select an answerNo, that's not right. This would increase the demand for coffee. No, that's not right. This would decrease the demand for coffee.No, that's not right. An increase in income would shift the demand curve to the right.Yes, that's correct. This would shift the supply curve for coffee to the right and encourage more production of coffee.

Market changes

The diagram below shows the market for olive oil. Which of the following events might have caused the shift in the supply curve?

	a)	Improved pesticides enhance crop yields
	b)	A cut in the price of vegetable oils
	c)	An increase in income
	d)	A severe drought in Spain
Please select an answerNo, that's not right. This would shift the supply curve for olive oil to the right as there would be further supply of olives available. No, that's not right. This would shift the demand curve not the supply curve.No, that's not right. An increase in income would shift the demand curve to the right.Yes, that's correct. This would shift the supply curve for olive oil to the left as Spain is a major producer of olives and with a drought the harvest will be much lower.

Market changes

The diagram below shows the market for hard disk music players. Which of the following events might have caused the shift in the demand curve?

	a)	Entry into the market of a major new supplier
	b)	A reduction in the price of the chips used in hard drive players
	c)	An increase in the rate of economic growth
	d)	The introduction of new phones and PDAs with built in flash music players
Please select an answerNo, that's not right. This would shift the supply curve for hard drive players to the right and not the demand curve. No, that's not right. This would shift the supply curve to the right as costs of production would be lower. The demand curve would not shift.No, that's not right. An increase in income would shift the demand curve to the right not to the left.Yes, that's correct. These new phones would be a substitute product and this would lead to a reduction in demand for hard drive players. This would shift the demand curve to the left.

Shifts in demand and supply curves

Consider the market for Mars Bars. Match the changes below with the shifts in supply and demand that they are likely to lead to.

a)	An increase in cocoa prices
b)	Health concerns over obesity
c)	An increase in price of other chocolate bars
d)	An improvement in productivity
Yes, that's correct. Well done. The supply curve will be affected by changes in costs and productivity, while the demand curve will be affected by health scares and changes in the price of substitutes.No, that's not quite right. Try again. The supply curve will be affected by changes in costs and productivity, while the demand curve will be affected by health scares and changes in the price of substitutes.Your answer has been saved.

Subsidy payments

Farmers are paid subsidies for the production of wheat. On a separate sheet of paper, draw a supply and demand diagram to show the impact of a subsidy and type an explanation of the diagram in the box below.

The impact of a subsidy is to shift the supply curve for the product to the right as shown in the diagram below. This is because the farmers become more willing to supply the good at each and every price. The supply curve shifts vertically downwards by the amount of the subsidy.

Shifts in demand

Choose appropriate phrases from the drop down boxes below to complete the explanation of shifts of a demand curve and movements along demand curves.

When the price of a good changes there will a the demand curve. If the price increases, there will be a movement upwards and to the left on the demand curve and this is called a in demand or a in quantity demanded. If there is a decrease in price, then there will be a movement downwards to the right and this is called an in demand or an in quantity demanded. However, if one of the determinants other than price changes then the whole demand curve will shift, either to the right or to the left. For example, if income increases, then the demand curve will shift to the . If, however, the price of a substitute falls, then the demand curve will shift to the .

Your answer has been saved.

What would cause an increase in the supply of coffee?

Several events could produce such a change: an increase in incomes, an increase in population, or an increase in the price of tea would each be likely to increase the quantity of coffee demanded at each price.

Which of the following would cause an increase in the quantity demanded of coffee?

A change in which of the following will cause a change in the quantity demanded of coffee? A change in the price of coffee will cause a change in the quantity demanded of coffee.

What is the effect of an increase in the price of coffee?

According to the law of demand, an increase in the price of a good, holding other things content, will decrease the quantity demanded for the good. Hence an increase in the price of coffee will decrease the quantity demanded for coffee.

What factors influence the demand for coffee?

First is the price of the coffee and its substitutes such as tea. When coffee increases in price and substitutes decrease in price, there will be a decrease in the demand for coffee. Secondly is an increase in a population whereby an increase in population results in an increase in coffee demand.