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Northern IrelandEconomics

The Market System

6 dot points across 6 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Why do people buy more of a good when its price falls, and what else makes the whole demand curve move?

Explain the law of demand, the demand curve, the difference between a movement along and a shift of the curve, and the non-price factors that determine demand.
A CCEA GCSE Economics answer on demand, covering the law of demand and the downward-sloping demand curve, the difference between a movement along the curve and a shift of the whole curve, and the non-price determinants of demand such as income, tastes, substitutes and complements.
11 min answer →

When do free markets fail to give the best outcome, and how can the government put it right?

Explain market failure through externalities, merit and demerit goods, public goods and the under-provision or over-provision of goods, and evaluate government responses such as taxes, subsidies, regulation and provision.
A CCEA GCSE Economics answer on market failure, covering negative and positive externalities, merit and demerit goods, public goods and the free-rider problem, and the main government responses including indirect taxes, subsidies, regulation, bans and direct state provision.
12 min answer →

How does the meeting of demand and supply set a market price, and what happens when something changes?

Explain how equilibrium price and quantity are set where demand equals supply, how surpluses and shortages are cleared by price, and how shifts in demand or supply change the equilibrium.
A CCEA GCSE Economics answer on price determination, covering market equilibrium where demand equals supply, how surpluses and shortages move price back to equilibrium, the price mechanism and its rationing and signalling roles, and how shifts in demand or supply change equilibrium price and quantity.
12 min answer →

How sensitive is the quantity bought or sold to a change in price, and why does it matter for revenue?

Calculate and interpret price elasticity of demand and supply, distinguish elastic from inelastic responses, explain the factors that determine elasticity, and link elasticity of demand to total revenue.
A CCEA GCSE Economics answer on price elasticity, covering the formula and calculation of price elasticity of demand and supply, the difference between elastic and inelastic, the factors that determine elasticity, and how the elasticity of demand affects a firm's total revenue when price changes.
13 min answer →

Why are firms willing to produce more when prices rise, and what else shifts the whole supply curve?

Explain the law of supply, the supply curve, the difference between a movement along and a shift of the curve, and the non-price factors that determine supply.
A CCEA GCSE Economics answer on supply, covering the law of supply and the upward-sloping supply curve, the difference between a movement along the curve and a shift of the whole curve, and the non-price determinants of supply such as costs of production, technology, taxes, subsidies and weather.
11 min answer →

Why does scarcity force everyone to make choices, and what does each choice really cost?

Explain the basic economic problem of scarcity and unlimited wants, the factors of production, opportunity cost, and the production possibility frontier as a model of choice.
A CCEA GCSE Economics answer on the basic economic problem, covering scarcity and unlimited wants, the four factors of production and their rewards, opportunity cost, and how the production possibility frontier models choice, efficiency and economic growth.
12 min answer →