Economics Past Questions and Answers

The table below represents a travellers's consumption of bottles of Coca-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 (5 marks)
(b) Draw the demand curve for the traveler's consumption of Coca-Cola. (The use of a graph sheet is essential) [10 marks]
(c) Explain the law of diminishing marginal utility as the basis for the slope of the traveler's demand curve. [5 marks]

The table below represents the cost function of a poultry farm. The price of a crate of egg is $21. Use the information contained in the table to answer the questions that follow.

Quantity of eggs (in crates)	Total cost (in $)
0	50
1	55
2	62
3	75
4	96
5	125
6	162
7	203
8	248

(a) What Is the fixed cost of the farm? (2 marks]
(b)(i) Calculate the marginal cost at each level of output. [9 marks]
(ii) What is the profit maximizing output of the farm? [3 marks]
(c) Draw the demand curve for the farm. [6 marks].

With an appropriate illustration, explain the circumstance in which an increase in output of a producer would
(a) decrease his sales revenue [10 marks]
(b) increase his sales revenue [10 marks}

(a) Define increase in supply. [4 marks]
(b) With the aid of diagrams, explain the effect of an increase in the supply of fish on the price of beef [16 marks]

(a) What is the equilibrium of a consumer? [5 marks]
(b) Explain how a consumer attains equilibrium in spending his income. [15 marks]