(a) (i) Define the economic terms: individual (consumer) demand; market demand.

(ii) Explain, with the aid of labelled diagrams, the relationship between individual (consumer)

demand and market demand. (20)

(b) (i) Distinguish between the economic meanings of a 'movement along a demand curve' and

a 'shift in a demand curve' for concert tickets.

Illustrate your answer using diagrams.

(ii) State and explain two factors that would cause a shift in a demand curve for concert

tickets. In each case explain how the factor affects the demand curve. (30)

(c) The Law of Diminishing Marginal Utility states that as more of a product is consumed,

eventually each additional unit of the good provides less additional utility (marginal utility).

(i) Explain two assumptions underlying the Law of Diminishing Marginal Utility.

A consumer in equilibrium buys 6 health bars at 0.80 each and 9 cartons of juice at 1.50

each. The marginal utility of the 6th health bar is 40 utils.

(ii) Using the Equi-Marginal Principle of Consumer Behaviour calculate the

marginal utility of the ninth carton of juice. (Show all your workings.)

(25)

[75 marks]

2. (a) Some Telecoms' analysts believe the main mobile operators in Ireland - Vodafone, O2,

Meteor and 3 - control an oligopoly and have little reason to make the market really

competitive. (The Irish Times, November, 2010)

(i) Outline three key features of an oligopolistic market.

Firms in an oligopolistic market may have objectives other than profit maximisation.

(ii) Outline two objectives firms in oligopoly may have, other than achieving the maximum

level of profits. (25)

(b) Using one clearly labelled diagram:

(i) Explain the shape of the 'kinked' demand curve facing a firm in oligopoly.

(ii) Explain the long run equilibrium position of this firm. (25)

(c) It is suggested that consumers prefer price competition in the market place, yet there are

benefits for consumers arising from non-price competition.

(i) Explain two reasons why consumers may prefer price competition.

(ii) Describe two benefits to consumers of non-price competition.