Economics Paper 2, May/June 2010
 Questions: 1 2 3 4 5 6 7 8 9 10 11 12 Main
Weakness/Remedies
Strength

Question 1

The table below represents a traveller's consumption of bottlcs ofCoca-Cola. Study the table carefully and answer the questions that follow.

 No of bottles Total Utility Marginal Utility 1 15 15 2 29 F 3 42 13 4 D 12 5 65 G 6 75 H 7 E 0

(a) Complete the missing figures D, E, F, G and H.
(b) Draw the demand curve for the traveller's consumption of Coca-Cola.
(The use 01" a graph sheet is essential).
(C) Explain the law of diminishing marginal utility as the basis for the slope ofthe traveller's demand curve.

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Observation

A great proportion of the candidates who attempted this question scored 10\\ marks. ['viost A them could not draw the appropriate demand curve as required in the (b) part 01 the question. Also, some candidates misplaced the explanation of the law of diminishing marginal utility as required in the (c) part of the question with the law of diminishing marginal returns. In order to score good marks, candidates were expected to present their answers as follow:

1. (b) To draw the demand curve there must be information 011 both quantities and prices. In
equilibrium MU= P, therefore the marginal utility COIUIllIl rcprescru-, prices

(c)    According to the law, marginal utility falls when quantity consumed increases

In equilibrium MU= P. therefore, for MU to Call, price must Call to encourage the consumer to consume more. In other words. it is as price falls that quantity demanded increases as shown in the demand curve