Quelpr
2 marksTheory of Consumer Demand

CAPE Economics Unit 1 · 2007 · Paper 2 · Question 1(d)(i)

State how an increase in spending budget by $20, ceteris paribus, affects the quantity of video games and novels consumed.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 1(a)(i)Define the term 'marginal utility'.[2 marks]
  2. 1(a)(ii)a)Calculate the marginal utility derived from video games.[5 marks]
  3. 1(a)(ii)b)Calculate the marginal utility derived from novels.[5 marks]
  4. 1(b)Draw a diagram illustrating Abina's budget constraint.[5 marks]
  5. 1(c)(i)Calculate the marginal utility per dollar for Abina's consumption choices.[5 marks]
  6. 1(c)(ii)State the optimal combination of video games and novels Abina should consume per month.[2 marks]
  7. 1(d)(ii)State how an increase in the price of one of the goods, ceteris paribus, affects the quantity of video games and novels consumed.[2 marks]
  8. 1(e)(i)a)Using the data from Table 2, draw a diagram showing the demand curve and supply curve for housing.[5 marks]
  9. 1(e)(i)b)Indicate the equilibrium price and equilibrium quantity of housing on the diagram.[2 marks]
  10. 1(e)(ii)a)Show a government-imposed price ceiling of $110 on rent on the diagram drawn in (e)(i).[3 marks]
  11. 1(e)(ii)b)i)State the likely effects of the rent price ceiling on the availability of housing.[6 marks]
  12. 1(e)(ii)b)ii)State the likely effects of the rent price ceiling on consumer surplus and producer surplus.[6 marks]

More practice: the rest of this paper · more Theory of Consumer Demand questions · all CAPE Economics Unit 1 past papers