Explain what is meant by a normal good and comment on the link between total utility, marginal utility and a consumer's demand curve for that good.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. Definition of a normal good, explanation of total utility and links to total consumption. Derivation of falling marginal utility as consumption increases linked through equi-marginal consumption and price change of a product to the demand curve.
2. L4 (9-12 marks): For clear explanations of the three terms and reference to the demand for a good. Establishment of the equi-marginal rule MUx/Px = MUy/Py. The effect of a change in price of a good on the ratio and the need to adjust the quantity demanded and hence MU in order to return to equilibrium must be explicitly stated.
3. L3 (7-8 marks): For clear explanations of two of the terms and reference to the demand for a good. Establishment of the equi-marginal rule MUx/Px = MUy/Py.
4. L2 (5-6 marks): For a clear explanation of 2 of the terms and an attempt to link it to the demand curve.
5. L1 (1-4 marks): For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial.
6. A consideration of the impact of taxation, government transfer payments and/or other government policies on income and wealth and hence the budget line and demand. Consideration of the effect of taxation on wealth and the consumption effects of changes in wealth. Consideration of the difference in the income effect for normal and inferior goods.
7. L4 (9-13 marks): For a response that explains two policies and their impact on income and wealth linked to consumer demand for normal goods and inferior goods. (No conclusion maximum 11).
8. L3 (7-8 marks): For a response which explains two policies and the effect on income or wealth. Either normal or inferior goods are considered.
9. L2 (5-6 marks): For a response which explains one policy with limited reference to demand.
10. L1 (1-4 marks): For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial.