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, firms, prices and quantities are fictional. Only addition, subtraction and simple multiplication are needed, so a four-function calculator is enough.
Questions 1, 5, 6 and 7 use the weekly supply of solar lanterns by three workshops in Selden, a fictional town:
| Price per lantern | North Works | Bayside | Kilnway |
|---|---|---|---|
| $20 | 30 | 10 | 0 |
| $25 | 45 | 25 | 10 |
| $30 | 60 | 40 | 20 |
| $35 | 75 | 55 | 30 |
| $40 | 90 | 70 | 40 |
Question 1 (multiple choice · foundation)
What is the market quantity of lanterns supplied per week at a price of $30?
- (A) 120
- (B) 60
- (C) 40
- (D) 160
Answer and explanation
Answer: (A). Market supply is the sum of quantities supplied at the same price: 60 + 40 + 20 = 120 lanterns.
- (B) is North Works’ quantity only. Market supply includes every seller.
- (C) is the rise in market quantity supplied from one row to the next (for example, 160 − 120), not a quantity supplied at a price.
- (D) is the market quantity at $35: it reads the wrong row.
Question 2 (multiple choice · core)
Which event would increase the supply of solar lanterns?
- (A) The price of the solar panels used to make lanterns falls.
- (B) The price of a lantern rises from $25 to $35.
- (C) Households’ incomes rise, and lanterns are a normal good.
- (D) The government introduces a tax of $3 on every lantern sold.
Answer and explanation
Answer: (A). Solar panels are an input. Cheaper inputs lower the cost of every lantern, so sellers offer more at every price: supply shifts right.
- (B) changes the good’s own price. Quantity supplied rises (80 to 160), but this is a movement along the curve, not an increase in supply.
- (C) is a determinant of demand, not supply. The supply curve does not move.
- (D) A per-unit tax acts like an extra cost, so supply decreases: a shift left.
Question 3 (multiple choice · core)
Which statement best explains why a workshop’s supply curve slopes upward?
- (A) Producing extra lanterns raises the marginal cost of each one, so the workshop makes more only if the price is high enough to cover that higher cost.
- (B) Buyers want more lanterns when the price is higher, so workshops make more.
- (C) A higher price shifts the supply curve to the right.
- (D) The workshop must pay its rent whatever quantity it produces.
Answer and explanation
Answer: (A). Marginal cost rises as output rises, and a seller produces each unit only while price ≥ marginal cost. So a higher price brings a larger quantity supplied.
- (B) gets buyers’ behaviour backwards: by the law of demand, buyers want fewer lanterns at a higher price. The slope of supply comes from sellers’ costs.
- (C) confuses a movement with a shift. A change in own price moves sellers along the curve.
- (D) describes a fixed cost. It does not change with output, so it cannot explain why more is supplied at a higher price.
Question 4 (calculation · core)
Yusuf runs a fictional bakery and bakes bread in batches of 10 loaves. His marginal cost per loaf for each batch is:
| Batch of 10 loaves | 1st | 2nd | 3rd | 4th | 5th |
|---|---|---|---|---|---|
| MC ($ per loaf) | 1.20 | 1.50 | 1.90 | 2.40 | 3.00 |
(a) How many loaves does Yusuf supply per day at a price of $2.00 per loaf? (b) Write his supply schedule for prices of $1.50, $2.00, $2.50 and $3.00. (c) The price of flour rises, adding $0.40 to the marginal cost of every batch. How many loaves does he now supply at $2.00 and at $2.50? (d) Is the change in (c) a change in quantity supplied or a change in supply? Explain.
Worked solution
(a) He bakes every batch whose MC is at most $2.00: the 1st ($1.20), 2nd ($1.50) and 3rd ($1.90). The 4th costs $2.40, more than the price. He supplies 30 loaves.
(b)
| Price | $1.50 | $2.00 | $2.50 | $3.00 |
|---|---|---|---|---|
| Loaves supplied | 20 | 30 | 40 | 50 |
(c) New MC: $1.60, $1.90, $2.30, $2.80, $3.40. At $2.00: 2 batches = 20 loaves (was 30). At $2.50: 3 batches = 30 loaves (was 40).
(d) A change in supply (a decrease). The price of bread did not change; an input price did. Yusuf offers fewer loaves at each price, so his supply curve shifts left.
Suggested mark points (4): 1 for 30 loaves with the price ≥ MC reasoning; 1 for the full schedule; 1 for 20 and 30 loaves; 1 for “decrease in supply” linked to the higher input cost at unchanged prices.
Common error: in (b), giving 10 loaves at $1.50. The 2nd batch has MC exactly $1.50, so it is worth baking at that price.
Question 5 (graph · core)
Use the Selden table.
(a) Draw a correctly labelled market supply curve S₁ for lanterns. (b) The market price rises from $25 to $35. State the change in quantity supplied and show it on your graph. (c) Separately, the government pays workshops a subsidy of $5 for every lantern they sell. Each workshop now supplies at any price what it used to supply at a price $5 higher. Show the new curve S₂ and state the quantity supplied at $30 on S₂.
Model answer and suggested Marlbridge rubric
(a) Market quantities: 40 at $20, 80 at $25, 120 at $30, 160 at $35, 200 at $40. Vertical axis: “Price ($ per lantern)”. Horizontal axis: “Quantity of lanterns (per week)”. Plot the five points and join them with an upward-sloping line labelled S₁.
(b) Quantity supplied rises from 80 to 160: an increase of 80 lanterns per week. Show an arrow along S₁ from ($25, 80) up to ($35, 160). The curve does not move.
(c) On S₂, quantity supplied at $30 equals the old quantity at $35: 160 lanterns (40 more than on S₁). S₂ quantities are 80 at $20, 120 at $25, 160 at $30 and 200 at $35 (the table stops at $40, so it cannot give S₂ at $40). Draw S₂ to the right of S₁ (or $5 below it at each quantity) and label it.
| Point | What earns it |
|---|---|
| 1 | Both axes labelled with variable and units; S₁ upward-sloping through the market values |
| 1 | Rise of 80 shown as a movement along S₁, with no shift |
| 1 | S₂ drawn to the right of S₁ and labelled, linked to the subsidy lowering effective cost |
| 1 | 160 lanterns at $30 on S₂ |
Do not award the third point if S₂ is drawn to the left, or if the subsidy is shown as a shift of demand.
Question 6 (constructed response · core)
Two things happen in Selden in the same month:
- Kilnway installs a soldering robot that halves the time needed to assemble a lantern.
- The price of LED desk lamps, which all three workshops can make with the same tools and workers, rises sharply.
(a) Explain the effect of the robot on Kilnway’s supply of lanterns. (b) Explain the effect of the higher desk-lamp price on the market supply of lanterns. (c) Can you be sure whether the market supply of lanterns increases or decreases overall? Explain. (d) Explain how each event is a response to an incentive or to technology.
Model answer and suggested Marlbridge rubric
(a) The robot raises productivity, so each lantern uses less labour and costs less to make. Kilnway’s marginal cost falls, so it offers more lanterns at every price: its supply increases (shift right). Because market supply is the sum of the workshops’ supply, market supply also increases from this event.
(b) Desk lamps are another good the workshops could produce. A higher desk-lamp price makes desk lamps more profitable, so workshops move tools and workers away from lanterns. At every price, fewer lanterns are offered: market supply decreases (shift left).
(c) No. The robot shifts market supply right; the desk-lamp price shifts it left. Without knowing the size of each shift, the overall direction is uncertain.
(d) The robot is a change in technology: the same resources now produce more. The desk-lamp price is a change in incentives: sellers compare the reward from each product and move resources to the more profitable one.
| Point | What earns it |
|---|---|
| 1 | Robot lowers cost (raises productivity), so supply increases (shift right) |
| 1 | Higher price of an alternative product draws resources away, so lantern supply decreases (shift left) |
| 1 | Overall effect uncertain because the shifts go in opposite directions, with sizes unknown |
| 1 | Correctly identifies one event as technology and the other as an incentive |
Question 7 (explanation · stretch)
(a) Two new workshops open in Selden. Each has exactly the same supply schedule as Bayside. Calculate the new market quantity supplied at $25 and at $35. (b) Use your answer to explain why an increase in the number of sellers is a shift of market supply, not a movement along it. (c) Selden’s workshops expect the price of lanterns to rise sharply next month, and lanterns are easy to store. Explain the likely effect on the supply of lanterns this month. (d) A student writes: “When the price of lanterns rose, supply increased, so the supply curve shifted right.” Correct the statement.
Model answer and suggested Marlbridge rubric
(a) Add 2 × Bayside’s quantity to the old market quantity. At $25: 80 + 2 × 25 = 130 lanterns. At $35: 160 + 2 × 55 = 270 lanterns.
(b) At the same prices ($25 and $35), the quantity supplied is higher (by 50 and 110). A larger quantity at an unchanged price means the whole curve has moved right. Only a change in the lantern price would move sellers along the curve.
(c) Sellers can earn more by selling next month, so some hold lanterns back now. At every price this month, fewer lanterns are offered: supply decreases now (shift left).
(d) A rise in the lantern’s own price increases the quantity supplied. Sellers move along the existing supply curve; the curve does not shift.
| Point | What earns it |
|---|---|
| 1 | 130 and 270 lanterns |
| 1 | More sellers raise quantity at unchanged prices, so supply shifts right |
| 1 | Expected higher future price decreases current supply (shift left), with the storage reason |
| 1 | Own-price rise identified as an increase in quantity supplied, a movement along the curve |
How did you do?
- Q1, Q4 or Q7(a) wrong: re-read “Why the supply curve slopes upward” and Worked example 1 in the study guide. Add quantities at each price.
- Q2, Q5 or Q6 wrong: re-read “The determinants of supply” and Worked example 2, and check Figure 2.
- Q3 wrong: re-read “Why the supply curve slopes upward”.
- Q7(b) to (d) incomplete: re-read “Change in quantity supplied versus change in supply”.
Then tick off the topic checklist.