Unit notes and practice questions
Everything here is for unit 4 of the Grade 9 Economics textbook: what the chapter covers, the short notes, practice questions with their answers, and the lesson video where one exists.
The cards filed under this chapter on the Grade 9 Economics page. Open one at a time.
When you use it
Reach for this card when defining supply to ensure it is not equated with the total inventory of a firm.
Watch out
Stock is the total stored output. Supply is only the specific quantity sellers are willing and able to offer at a given price.
Drafted from Grade 9 Economics, pages 45-61, then checked twice before it went up
When you use it
Use this when analyzing how Quantity Demanded changes inversely with Price under the ceteris paribus condition.
Watch out
Demand requires both willingness and ability to pay. A mere desire without purchasing power is not economic demand.
Drafted from Grade 9 Economics, pages 45-61, then checked twice before it went up
| Market State | Condition | Price Direction |
|---|---|---|
| Equilibrium | Stable | |
| Excess Demand | Rises | |
| Excess Supply | Falls |
When you use it
Use this to identify whether a market is in balance, facing a shortage, or holding a surplus at a given price.
Watch out
In excess demand, buyer competition pushes the price upward toward equilibrium, not downward.
Drafted from Grade 9 Economics, pages 45-61, then checked twice before it went up
When you use it
Use this to describe the direct or positive relationship between Price and Quantity Supplied, ceteris paribus.
Watch out
Supply curves slope upward to the right because higher prices give producers an incentive to supply more.
Drafted from Grade 9 Economics, pages 45-61, then checked twice before it went up
10 multiple-choice questions written against this chapter, each with its answer and the reason. Try one before you open the answer.
Question 1
A desire becomes an effective demand only when it is supported by which three conditions?
Answer: A Ability to pay, willingness to pay, and availability of the good
Why
According to the textbook, a desire becomes an effective demand when it has three features: ability to pay for the good desired, willingness to pay the price, and availability of the good itself.
Question 2
What does the law of demand state about the relationship between the price of a good and its quantity demanded, ceteris paribus?
Answer: A They are inversely related.
Why
The law of demand states that, ceteris paribus (other things remaining the same), price and quantity demanded are inversely related. When price goes up, quantity demanded goes down.
Question 3
What does the law of supply show about the relationship between price and quantity supplied?
Answer: A There is a direct or positive link between price and quantity supplied.
Why
The law of supply shows an upward-sloping relationship, meaning there is a direct or positive link between a commodity price and the quantity supplied.
Question 4
What is market equilibrium?
Answer: A A situation where quantity demanded equals quantity supplied
Why
Market equilibrium refers to a situation in which the quantity demanded of a commodity equals the quantity supplied of the commodity.
Question 5
In economics, what is the key difference between stock and supply?
Answer: A Stock is the total volume produced less quantity sold, while supply is the quantity actually brought to market for sale.
Why
Stock is the total volume produced during a period less the quantity already sold out (potential supply). Supply refers to the quantity that is actually brought to the market for sale.
Question 6
In the demand function Qd = f(P), what do Qd and P stand for?
Answer: A Qd is quantity demanded and P is the commodity price.
Why
In the standard demand function Qd = f(P), Qd represents the quantity demanded and P represents the commodity price, assuming all other things remain the same.
Question 7
At a market in Hawassa, three buyers want to purchase oranges at 5 birr per kg. Consumer 1 demands 3 kg, Consumer 2 demands 5 kg, and Consumer 3 demands 1 kg. What is the total market demand at this price?
Answer: A 9 kg
Why
Market demand is found by summing the quantities demanded by all individual buyers horizontally: 3 kg + 5 kg + 1 kg = 9 kg.
Question 8
When the price of a good is higher than the equilibrium price, quantity supplied exceeds quantity demanded. What will competition among sellers do to the price?
Answer: A It will push the price down toward the equilibrium price.
Why
In a case of excess supply, competition among sellers to sell their goods will push the price down until it reaches the equilibrium price where demand equals supply.
Question 9
Suppose in a local market, at a price of 10 birr per kg, consumers demand 800 kg of oranges, but sellers only supply 400 kg. What is the market situation?
Answer: A Excess demand of 400 kg, which creates competition among buyers and pushes price up
Why
Excess demand equals quantity demanded minus quantity supplied (800 kg - 400 kg = 400 kg). Because buyers want more than sellers offer, competition among buyers pushes the price up toward equilibrium.
Question 10
How is a market supply curve derived from individual seller supply curves?
Answer: A By horizontally summing the quantities supplied by all individual sellers at each price
Why
The textbook explains that market supply is calculated by horizontally summing the quantities supplied of the commodity by all sellers at each market price.
The app holds 12 questions on this unit, marked as you go. These are the first 10.
Unit 4 runs from page 45 to page 61 of the Ministry of Education edition.
Ministry of Education edition, English, 130 pages
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