a.

In a market economic system resources move automatically as a

result of changes in price. In turn, price changes are determined by
interaction of market forces.
(1) What are the 3 key allocation decisions [3]
(2) Discuss the difference between planned economic system,
mixed economic system and free market economic system
with example of a country [3]
b. Differences between
(1) Individual demand and market demand [2]
(2) Extension in supply and an increase in supply [2]
(3) Complements and substitutes [2]
(4) Market equilibrium and market disequilibrium [2]
(5) Capital intensive and labour intensive [2]
(6) Microeconomics and macroeconomics [2]
(7) Households and firms [2]
c. What is the relationship between demand and price [3]
d. Explain the main factors influencing demand for cinema tickets. [7]
e. What is meant by an inferior goods? [2]

f. In a market economic system resources move automatically as a

result of changes in price. In turn, price changes are determined by
interaction of market forces.
1. What are the 3 key allocation decisions [3]

2. Discuss the difference between planned economic system, [3]

mixed economic system and free market economic system
with example of a country
3. Differences between
1. Individual demand and market demand [2]

Individual demand is the demand of one consumer whereas market

demand is the total demand for a product.

2. Extension in supply and an increase in supply [2]

An extension in supply is a movement along a supply curve

whereas an increase in supply is a shift to the right of the supply
curve. Whilst an extension in supply is caused by a rise in the price
of the product itself, an increase in supply is the result of a change
in an influence on supply other than a change in the price of the
product itself.

3. Complements and substitutes [2]

 [2]
A complement is a product used with another product whereas a [2]
substitute is used instead of another product. [2]
[2]
4. Market equilibrium and market disequilibrium
5. Capital intensive and labour intensive
6. Microeconomics and macroeconomics
7. Households and firms
8. What is the relationship between demand and price [3]

Demand and price are inversely related. A rise in price would cause
a fall in demand, called a contraction in demand. This is because a
higher price would reduce people's ability and willingness to buy a
product. 
A fall in price would cause an extension in demand as consumers
would be able to buy more of a product and would be likely to
switch a way from substitutes towards the product.

9. Explain the main factors influencing demand for cinema tickets. [7]

One of the main factors influencing demand for cinema tickets is

price. A rise in the price of cinema tickets would be expected to
cause a contraction in demand as shown in Figure 1

Other influences would cause an increase or decrease in demand.

An increase in income would usually be expected to increase
demand for cinema tickets. On occasion, however, a decline in
incomes can result in more people visiting the cinema as a form of
escapism.

A change in the price of other forms of entertainment will affect

demand for cinema tickets. Tickets to sports events, for instance,
may be a substitute to cinema tickets. A rise in the price of tickets to
cricket matches may encourage more people to visit the cinema. A
fall in the price of a complement to visiting the cinema, such as
transport may have a similar effect. A successful advertising
campaign and the launch of a new popular film would also be likely
to increase demand for cinema tickets. Indeed, sales of cinema
tickets tend to be highest in the first three weeks of the release of a
film.

A fall in population would cause a decrease in demand for cinema

tickets as there would be fewer people to visit the cinema. This is
shown by a shift to the left of the demand curve as shown in Figure
13

10. What is meant by an inferior goods? [2]