WAEC Economics 2018 Theory — Question 7

Model answer

(a) A demand schedule is a tabular presentation of the quantity demanded of a good at different price levels. (b) The law of demand states that the higher the price of a commodity, the lower the quantity demanded, and vice versa (ceteris paribus). (c)(i) Competitive demand: a type of demand where two goods are demanded inversely — increased demand for one leads to reduced demand for the other, e.g. Milo and Bournvita. (ii) Derived demand: demand for one factor of production that arises from the demand for another related factor, such as land and labour. (iii) Joint demand: when two goods are demanded together because they cannot be separated in use, e.g. demand for liquid milk and the tin it is packaged in. (iv) Composite demand: a situation where a single commodity can be used to satisfy more than one want, e.g. petroleum used as fuel for cars and generators.