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4 marksMarket Equilibrium

CAPE Economics Unit 1 · 2011 · Paper 2 · Question 2(b)(ii)a)

Use the demand and supply diagram to explain the effect on equilibrium price and quantity of an increase in consumer income.

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Other parts of this question

  1. 2(a)(i)With the aid of indifference curves, explain consumer equilibrium.[10 marks]
  2. 2(a)(ii)Using the indifference curves drawn previously, explain how consumer equilibrium changes as consumer income increases.[3 marks]
  3. 2(b)(i)Draw a demand and supply diagram for a good.[4 marks]
  4. 2(b)(ii)b)Use the demand and supply diagram to explain the effect on equilibrium price and quantity of an improvement in the technology used in producing a good.[4 marks]

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