1971-11-21 — Page 15

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育教僑華頁三第張四第日四初月十年亥辛靥夏 WAH KU YAT PO

育教僑華

1972英文中學會考試題預習專欄

堅道英文書院主編

經濟及公共事務科

(E)

RCONOMIC AND PUBLIC AFFAIRS (2)

QUESTION (5) Explain the five laws of supply and demand

illustrate your answer.

ANSWERS

• Otherwise known as the law of demand, the first law of supply and demand states that at a higher pric8 a lesser quantity of a commodity is bought than at lower price. If the law is ill-strated graphically the demand curve will therefore slope down warda, as shown below:

2.1 NOV 1971

CITY HALL

As can be seen from the graph above, the buyer is

willing to pay for price p, for q2, but the supplier

be willing to sell this quantity only at pricep Thus both

3

are prices which both the buyer and the prices Pend supplier are not agreed on.

But at price P for which

quantity Q' is offered for sale, the buyer is happy to Pay and willing to accept the quantity offered, Price

pis (according to the third law of supply and demand) the equilibrium price.

When the demand for a commodity rises, there wil be an increase in the price of the commodity followed by:an-increase in the quantity aupplied. This is the forth law of supply and demand.

Referring to the graph below, you will notice that the original demand as represented by the curve

so that at quantity the equilibrium price is P, but when demand increases (a new demand curve DD is now drawn) supply cannot be increased suddenly, so the price Le raised to p. Later when supply is able to adjust itself to meet the new change in demand, the price falls

change:in to p2 which noverthelees is higher than the original price Pl, and the quantity supplied is now Q thus 12Jnetrating the fourth Jaw of supply and demand.

FRICA

CUARTET

PRICE:

日期星:日-廿月一十年一七九一歷公年十六國民華中

科學與人生

郭新·

我們的銀河系

沒有行星,ㄓ不知頂有沒有高徒都整的動物。低 足許。顯然我們仍不知道共化的四百億個太陽有 它的中心。到現在,入離感受調佻地位的微不 到太陽凡它很小很平几的一個成員,更不是在 渡個星盤,我們一倥液它爲做河系,我們发

太陽系的年懿約四十莖究十億年,因此地球日篇 悟。大學系大所以二位年一遮的鸿俊旋轉。因爲 它的中心施秘。近中心的候快些,近邊沿的輔说 中心前距離肌鐵三萬光年。這星郳內的具都繞 设沿的厚良只有五千光年左右。太際難忍张子,

「當然,你也不會錯過那-

滿神話的銀河,一些光 光,才然發還劉它們基攵網的多,俺的花。 【戰天的繁幕,恃歡它們的夹越。餘究了城市的燈一」的時代已一去不返了。 一大忑的花兒,它們擠得避嫌撈,使我們要用溶,有四百億顆星之多,但它的快積之大使吊足仍 一帶橫過天邊,和其他閃缩的足足又何等不同!!(公厘),亦熙銀河系的直徑約恃六千萬公里—— 可是,猱望遠鏡一君,這越京的光帶研成了這已是一個我們很難狻係的阿擔了。將然靚河系。 若你曾到沙郊外去叫营,你一定會寫到那一般少,我們已不能抹煞還瘸可能性,「唯我獨 「隔得舢縠n平均來說,兩顆星的佢離約是它們在

若你亲仡得上实用的北例 地球立經幫

| 其他方向多得多呢?...

鐵可分得的一倍,所以照相識的可能性還不多的事

~ 於客。用一些緊來 说明錤河系的「空」,在

在一星素有四百愆照恆風,而太陽造其中之一。 星 日,壞的形狀像一個從子,而太陽的位置約在意的,消息刊第六十哩的大立方中,H 能也不多,阿瑊我們只很近過染了。只有向襪子一頁請讀者、則此搬大,相城的第 靜。從太陽向上或向下得去,我們只殺兒較少的三張第三不過,與河洛中心的魚。 一

小 個條案:我們的太規者一個只生的部分,二尙有教育 土雕乘六中隆業 米

讀第刊教

者三

「有一沙大小的物質。

「形也會發生,但在一百

直徑大於八萬光年,中心的孝約一落五千光年-2 可以用一些數字大姊明,盡祧子(原染一的 期的中心望去時,我們才會以到大基其他的面價。从注意

恒星,内偽碟子基嗝的,向外看去,我們所見的

注頁三消尙

意請張息有

(+1)

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Illnetrating the 1st Law of Supply & Demand

The tendency of most suppliers ie that when the price is high a greater quantity of the commodity is put out for sale, and at lower price, a lesser quantity is put out for sale. This is the second law of supply and demand The graph delow shows a typical supply curve, which is plotted in accordance with this law.

QUANTITY

the effect of an increase in demand (4th liaw of Supply and Demand)

The fifth law of supply and demand states that if the supply of a commodity is increased the price will drop and the quantity demanded may be illustrated belows

QUANTITY

Flaatio Supply

Supply is said to be inelastic if a change in price producea very little or no change in the quantity of a commodity that is to be supplied as illustrated by the graph below-

PRICE

QUANTITY

PRICE

PRICE

QUANTITY

Inelastic Supply.

Illustrating the 2nd Lay of 5

Demand

The third law of supply and demand states that. the interaection of the demand curve and the supply: ourve gives the equilibrium price of the commodity.t the

equilibrium price is the price of the commodit at which the buyer is willing to pay for a given quantity which the supplier is willing to sell,

PRICE

QUANTIFY

Tilustrating the 3rd Law of Supply 8. Demand

QUANTITY

The affect of: an increase in suppl

(5th Law of Supply & Demand)

The original aupply is at s's'. When quantity is offered for sale, the equilibrium price P, but when supply is increased (as represented by a new supply

s2s2): curve

the price drops to P ; and it is likely that the quantity demanded may show an increase gardually

QUESTIONS (6) What do you mean by supply? Distinguish

between elastic and inelastic supply. If the price remains congtant, ander wha conditions can supply be changed.7

ANSWER:

In the economio sense, supply is the amount of "dommodity that is offered on the market for sale at

given price and at a given time.

Supply is said to be elastic if a change in price. produces a great change in the quantity that is to be #upplied, as illustrated by the graph belowan

If the price remains constant, supply can still te influenced by other factors such as those discussed below-

Produdtion coats do play a very important role in determining whether the quantity of a commodity that de supplied is to be increased or decreased. Higher costs of production would mean a decrease in supply, where as cheaper costs of production would mean that a greater quantity of the commodity is now put up for male. The fact that Japanese manufacturera can out down their production costs without affecting the total output of television sets, explains why our market is flooded with Japanese television sete, There are however, few Rolls-Royce cars in Hong Kong because of their high production coats.

If the Government introduces a new tax or e higher tax on a particular commodity, the supply of that commodity is decreased, whereas if an existing tax is removed or a drop in the tar of a commodity occurs, a greater quantity of the commodity will be offered for

Production methode can also affect supply. If production methods are improved, there will be a zeđuote ion in production costs and this in tura would result in a greater quantity of the commodity to be supplied This explaine why research has always been cazzled or to improve our production methods, so that a greater. output would moan that a greater number of consumers would be able to enjoy what ia produced in the country. The result will be that there is a higher standard of living for everyone.

Agricultural products, on the other hand, are supplied according to changes in the weather. Ideal weather conditions would permit a better yield than poor weather condition.

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