Exam (elaborations)
ecs1500 Assignment 2 Semester 2 2023
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7/12/22, 8:12 PM Assessment 2: Attempt reviewMENU
Dashboard / Courses / UNISA / 2022 / Semester 1 / ECS1500-22-S1 / Welcome Message / Assessment 2
Started on Sunday, 3 April 2022, 4:28 PM
State Finished
Completed on Sunday, 3 April 2022, 5:28 PM
Time taken 1 hour
Marks 4.00/40.00
Grade 10.00 out of 100.00
Feedback You did not pass this assessment. Please revise Learning Units 3, 4 and 5 and study the feedback that you received very
carefully. Then try to do this assessment again. You can submit this assessment a maximum of three times.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=1918066&cmid=117205 1/17
,7/12/22, 8:12 PM Assessment 2: Attempt review
Question 1
Correct
Mark 2.00 out of 2.00
MENU
If the wage level of workers in the diamond industry increases, this will result in ________.
Dashboard / Courses / UNISA / 2022 / Semester 1 / ECS1500-22-S1 / Welcome Message / Assessment 2
[1] an increase in the equilibrium price of diamonds
[2] a decrease in the equilibrium price of diamonds
[3] an increase in the equilibrium quantity of diamonds
[4] a decrease in the equilibrium quantity of diamonds
Select one:
a. only options [1] and [4] are correct
b. only options [2] and [3] are correct
c. only options [1] and [3] are correct
d. only options [2] and [4] are correct
Your answer is correct.
Incorrect.
When the wage level of workers in the diamond industry increases, it means that the input costs of diamond suppliers will increase, thus the
same amount of diamonds can now only be supplied at a higher price or, put differently, less will be supplied at each price. This is called a
decrease in supply, and is illustrated by a leftward shift of the supply curve, from S to S' in the following diagram:
Equilibrium in the diamond market was as E0, at a price of P0 and quantity Q0. The decrease in supply is illustrated by a leftward shift of the
supply curve from S to S'. At the original equilibrium price, there will now be excess demand, due to decreased production. This will result in
upward pressure on prices, and the price level will increase, from P0 to P1 in the diagram. The increased price level results in a decrease in
demand, thus a movement along the same demand curve D1. At a quantity of Q1, the quantity demanded will once again equal quantity
supplied, given a price of P1.
Therefore the increase in wages which results in a decrease in supply, will lead to a new equilibrium position (E1) at a higher price (P1) and a
lower quantity (Q1). Therefore [1] is correct and [2] is incorrect, while [3] is incorrect and [4] is correct.
The correct answer is: only options [1] and [4] are correct
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=1918066&cmid=117205 2/17
,7/12/22, 8:12 PM Assessment 2: Attempt review
Question 2
Incorrect
Mark 0.00 out of 2.00
MENU
The question is based on the following diagram:
Dashboard / Courses / UNISA / 2022 / Semester 1 / ECS1500-22-S1 / Welcome Message / Assessment 2
The law of demand states that the higher the price of a good or service (all other things remaining the same), the lower the quantity
demanded, and the lower the price of a good or service (all other things remaining the same), the greater the quantity demanded.
Which shift in the diagram illustrate the law of demand?
Select one:
a. from B to E
b. from C to B
c. from C to B
d. from A to C
Your answer is incorrect.
The law of demand, as explained in the question and in the study guide, has to do with the relationship between the price of a good and the
quantity demanded – when the price of a good increases, the quantity demanded by consumers decreases. This relationship is represented
by a demand curve. Thus any movement along the same demand curve illustrates this relationship.
A shift of a demand curve takes place due to any other factor that changes in the market, except the price. Therefore the shift from C to B,
which is due to an increase in demand (the curve shifts from D to D'), does not illustrate the law of demand.
The shift from A to C does not represent a shift along the same demand curve, but will be the result of a decrease in demand (illustrated by
the shift of the demand curve from D' to D) combined with an increase in supply (illustrated by a shift of the supply curve from S to S').
A shift from C to E illustrates an increase in demand (i.e. a shift of the demand curve from D to D'). The increase in demand can, once again,
be caused by any factor that affects demand that changes, except for the price. Therefore this also does not represent the law of demand.
The correct answer is: from B to E
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=1918066&cmid=117205 3/17
, 7/12/22, 8:12 PM Assessment 2: Attempt review
Question 3
Incorrect
Mark 0.00 out of 2.00
MENU
Consumers regard tea as a substitute for coffee. When the price of tea increases …
Dashboard / Courses / UNISA / 2022 / Semester 1 / ECS1500-22-S1 / Welcome Message / Assessment 2
Select one:
a. the quantity of tea demanded will increase
b. the quantity of coffee demanded will decrease
c. the demand for tea will increase
d. the demand for coffee will increase
Your answer is incorrect.
When the price of tea increases, this will result in a decrease in the quantity demanded of tea, and a movement along the same demand
curve from A to B in Figure (a). Since coffee is a substitute for tea, consumers will now buy more coffee to replace the tea they previously
consumed. There is an increase in the demand for coffee. This is illustrated by a movement of the demand for coffee curve to Dcoffee' in
Figure (b), i.e. a rightward shift of the demand.
In the coffee market, we can expect that the increase in the demand for coffee will result in an increase in the equilibrium price of coffee, as
well as an increase in the equilibrium price of coffee (to see this in figure (b) you have to add a supply curve).
The correct answer is: the demand for coffee will increase
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=1918066&cmid=117205 4/17
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