Quelpr
2 marksTheory of Consumer Demand

CAPE Economics Unit 1 · 2015 · Paper 2 · Question 1(b)(i)

Romain's maximum willingness to pay for a chocolate bar is 5.00, and the current market price is 2.50, at which he purchases 6 chocolate bars.

Define the term 'consumer surplus'.

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Other parts of this question

  1. 1(a)(i)Copy and complete Table 1 to show the total utility and marginal utility derived from consuming 1 to 5 chocolate bars.[5 marks]
  2. 1(a)(ii)a)Define total utility.[2 marks]
  3. 1(a)(ii)b)Define marginal utility.[2 marks]
  4. 1(a)(ii)c)Define the law of diminishing marginal utility.[2 marks]
  5. 1(a)(iii)a)State the point at which Romain begins to lose satisfaction from consuming each additional chocolate bar.[1 mark]
  6. 1(a)(iii)b)State the point at which Romain maximizes his satisfaction from consuming chocolate bars.[1 mark]
  7. 1(b)(ii)Draw Romain's demand curve.[4 marks]
  8. 1(b)(iii)On the demand curve drawn in (b)(ii), shade and label the total consumer surplus.[2 marks]
  9. 1(c)With reference to marginal utility theory, justify the shape of Romain's demand curve for chocolate bars.[4 marks]

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