These are original Marlbridge practice questions, not past exam questions. The mark points are a suggested Marlbridge rubric to help you check your work; they are not an official scoring guideline. All places, people, prices and quantities are fictional. Only addition, subtraction, multiplication and division are needed, so a four-function calculator is enough.
Questions 1, 2 and 5 use the weekly demand for climbing-wall sessions at the leisure centre in Brennock, a fictional town. The centre has three groups of customers:
| Price per session | Students | Families | Retirees |
|---|---|---|---|
| $4 | 300 | 500 | 200 |
| $6 | 240 | 380 | 160 |
| $8 | 180 | 260 | 120 |
| $10 | 120 | 140 | 80 |
| $12 | 60 | 20 | 40 |
Question 1 (multiple choice · foundation)
What is the market quantity of climbing-wall sessions demanded per week at a price of $8?
- (A) 560
- (B) 260
- (C) 1,000
- (D) 220
Answer and explanation
Answer: (A). Market demand is the sum of quantities demanded at the same price: 180 + 260 + 120 = 560 sessions.
- (B) is the families’ quantity only. Market demand includes every buyer.
- (C) is the market quantity at $4, not $8: it reads the wrong row.
- (D) is the fall in market quantity demanded between one row and the next (for example, 780 − 560), not a quantity demanded at a price.
Question 2 (multiple choice · core)
Which event would decrease the demand for climbing-wall sessions in Brennock?
- (A) The leisure centre raises the price of a session from $6 to $8.
- (B) A new trampoline park in Brennock cuts the price of its sessions.
- (C) Incomes in Brennock rise, and climbing-wall sessions are a normal good.
- (D) A shop cuts the price of renting climbing shoes, which climbers need.
Answer and explanation
Answer: (B). Trampoline sessions are a substitute for climbing. A cheaper substitute draws customers away, so demand for climbing decreases: the curve shifts left.
- (A) changes the good’s own price. Quantity demanded falls (780 to 560), but this is a movement along the curve, not a decrease in demand.
- (C) increases demand for a normal good: a shift right.
- (D) concerns a complement. A cheaper complement increases demand: a shift right.
Question 3 (multiple choice · core)
The price of climbing sessions falls. Which statement describes the substitution effect?
- (A) Climbing is now cheaper compared with other leisure activities, so some people choose climbing instead of those activities.
- (B) A family’s fixed leisure budget now buys more in total, so the family can afford more sessions.
- (C) Each extra session gives a climber less extra satisfaction than the one before.
- (D) More people move to Brennock, so more sessions are bought at every price.
Answer and explanation
Answer: (A). The substitution effect is the switch towards a good whose price has fallen relative to other goods.
- (B) describes the income effect: the price fall raises purchasing power.
- (C) describes diminishing marginal utility, a third reason the curve slopes down, but not the substitution effect.
- (D) is a change in the number of buyers, a determinant that shifts demand. It is not a reason for the slope of the curve.
Question 4 (calculation · core)
Rafi pays per class at a fictional gym. His marginal benefit from each class per month, valued in dollars, is:
| Class | 1st | 2nd | 3rd | 4th | 5th | 6th |
|---|---|---|---|---|---|---|
| MB ($) | 15 | 12 | 10 | 7 | 4 | 2 |
(a) How many classes does Rafi attend in a month if each class costs $8? (b) Write Rafi’s demand schedule for prices of $2, $4, $7, $10, $12 and $15. (c) Rafi’s friends Sana and Tomas have exactly the same marginal benefits. Find the market quantity demanded by the three friends at $10 and at $4. By how much does it change when the price falls from $10 to $4? (d) Explain why Rafi’s demand schedule obeys the law of demand.
Worked solution
(a) Rafi attends every class whose MB is at least $8: the 1st ($15), 2nd ($12) and 3rd ($10). The 4th class is worth only $7 to him. He attends 3 classes.
(b)
| Price | $2 | $4 | $7 | $10 | $12 | $15 |
|---|---|---|---|---|---|---|
| Classes demanded | 6 | 5 | 4 | 3 | 2 | 1 |
(c) At $10: 3 + 3 + 3 = 9 classes. At $4: 5 + 5 + 5 = 15 classes. Quantity demanded rises by 15 − 9 = 6 classes.
(d) Each extra class gives Rafi a smaller marginal benefit (diminishing marginal utility). He only adds a class of lower value if the price falls to that value or below. So a lower price brings a higher quantity demanded.
Suggested mark points (4): 1 for 3 classes with the MB ≥ price reasoning; 1 for the full schedule; 1 for 9, 15 and a change of 6; 1 for linking falling MB to the downward slope.
Common error: in (b), giving 3 classes at $7. The 4th class has MB exactly $7, so it is worth buying at $7 (MB = price); Rafi attends 4.
Question 5 (graph · core)
Use the Brennock table.
(a) Draw a correctly labelled market demand curve D₁ for climbing sessions. (b) The leisure centre raises its price from $6 to $10. State the change in quantity demanded and show it on your graph. (c) Separately, a popular home climbing-game console becomes much cheaper, and every group now demands 25% fewer sessions at every price. Show the new curve D₂ and state the quantity demanded at $8 on D₂.
Model answer and suggested Marlbridge rubric
(a) Market quantities: 1,000 at $4, 780 at $6, 560 at $8, 340 at $10, 120 at $12. Vertical axis: “Price ($ per session)”. Horizontal axis: “Quantity of sessions (per week)”. Plot the five points and join them with a downward-sloping line labelled D₁.
(b) Quantity demanded falls from 780 to 340: a fall of 440 sessions per week. Show an arrow along D₁ from the point ($6, 780) up to ($10, 340). The curve does not move.
(c) D₂ quantities are 75% of D₁: 750 at $4, 585 at $6, 420 at $8, 255 at $10 and 90 at $12. Draw D₂ to the left of D₁ and label it. The game is a substitute for climbing, so its lower price decreases demand.
| Point | What earns it |
|---|---|
| 1 | Both axes labelled with variable and units; D₁ downward-sloping through the market values |
| 1 | Fall of 440 shown as a movement along D₁, with no shift |
| 1 | D₂ drawn to the left of D₁ and labelled |
| 1 | 420 sessions at $8 on D₂, with the substitute named as the reason |
Do not award the third point if D₂ is drawn to the right, or if the change in (b) is shown as a shift.
Question 6 (constructed response · core)
In Dunmere, a fictional town, a paintball park sells tickets for $25. Until this year anyone aged 14 or over could buy a ticket. A new regulation raises the minimum age to 18. Ayesha, aged 16, earns $30 a week from a part-time job and has one free afternoon each week.
(a) Explain why a well-defined system of property rights matters for buyers like Ayesha when they buy anything in a market. (b) Identify three constraints Ayesha faces when deciding whether to buy a paintball ticket, one of each type: income, time, legal. (c) Explain the effect of the new regulation on the market demand for paintball tickets in Dunmere, and say how it appears on a graph. (d) The park also cuts its price to $20 for adults. Explain why this does not shift the demand curve.
Model answer and suggested Marlbridge rubric
(a) Property rights mean that once Ayesha pays, the good or service is legally hers to use, and the law will enforce the deal. Without that security, buyers would be unwilling to pay, because they could lose what they paid for. Clear property rights make voluntary exchange worthwhile, so markets can function.
(b) Income: she earns only $30 a week, so a $25 ticket would use most of it. Time: she has only one free afternoon a week. Legal: at 16, she is now below the minimum age, so she cannot buy a ticket at any price.
(c) Everyone aged 14 to 17 is removed from the market, so the number of buyers falls. At every price, fewer tickets are demanded. Demand decreases: the curve shifts left.
(d) The price of the good itself is not a determinant of demand. A price cut changes the quantity demanded, a movement down along the (new) demand curve.
| Point | What earns it |
|---|---|
| 1 | Property rights linked to the security of ownership and willingness to pay or trade |
| 1 | All three constraints correctly identified from the context |
| 1 | Regulation reduces the number of (legal) buyers, so demand decreases and the curve shifts left |
| 1 | Own-price change is a movement along the curve, not a shift |
Question 7 (explanation · stretch)
In Tessaly, a fictional country, average incomes rise by 8% in one year. Prices do not change. At a price of $1.20 per pack, weekly purchases of a basic instant noodle brand fall from 12,000 to 10,500 packs. At $15 per meal, weekly restaurant meals rise from 3,000 to 3,600.
(a) Classify each good as normal or inferior. Justify each answer with the data. (b) Calculate the percentage change in quantity at the unchanged price for each good. (c) Explain why these changes are shifts of demand, not movements along the demand curves. (d) Next, Tessaly’s government announces that a tax will raise restaurant prices from next month. Explain the likely effect on the demand for restaurant meals this month.
Model answer and suggested Marlbridge rubric
(a) The noodles are an inferior good: income rose and quantity bought at the same price fell. Restaurant meals are a normal good: income rose and quantity bought at the same price rose.
(b) Noodles: (10,500 − 12,000) ÷ 12,000 × 100 = −12.5%. Restaurant meals: (3,600 − 3,000) ÷ 3,000 × 100 = +20%.
(c) The prices of both goods stayed the same ($1.20 and $15). Quantity changed at an unchanged price, so the cause was a determinant (income), not the good’s own price. The noodle demand curve shifts left; the restaurant-meal demand curve shifts right.
(d) Buyers expect a higher price next month, so some bring meals forward to this month. Demand this month increases: the curve shifts right now.
| Point | What earns it |
|---|---|
| 1 | Both goods classified correctly, using the direction of quantity change after the income rise |
| 1 | −12.5% and +20% |
| 1 | Change at an unchanged price identified as a shift, with directions for both curves |
| 1 | Expected future price rise increases current demand |
How did you do?
- Q1 or Q4 wrong: re-read “From marginal benefit to individual demand” and Worked example 1 in the study guide. Add quantities at each price.
- Q2, Q5 or Q7 wrong: re-read “The determinants of demand” and Worked example 2, and check Figure 2.
- Q3 wrong: re-read “Why the demand curve slopes downward”.
- Q6 incomplete: re-read “Markets need property rights, incentives and constraints”.
Then tick off the topic checklist.