ECS1500 ASSIGNMENT 01 SEMESTER 1 ANSWER DISCUSSION (LEARNING UNITS 1–
4)
1.1 The correct answer is option [2] as the statement is false.
Prices bring about voluntary responses from buyers and sellers so that market
equilibrium can be achieved. This is because buyers and sellers agree on the t...
1.1 The correct answer is option [2] as the statement is false.
Prices bring about voluntary responses from buyers and sellers so that market
equilibrium can be achieved. This is because buyers and sellers agree on the terms that
determine their exchange of goods and services.
1.2 The correct answer is option [2] as the statement is false.
A linear curve is a straight line with the exact same slope along the whole curve. The
curve showing unemployment in South Africa goes up and down and does not have a
consistent slope. It is not a linear curve.
1.3 The correct answer is option [2] as the statement is false.
Between 2008 Q1 and Q4, national unemployment was declining. From 2009 Q1 to Q4,
there was a steady increase. Thereafter, between 2010 and 2015, South Africa’s
unemployment rate was averaging 25% and has been on an upward trend from 2016
onwards. It has now reached its highest level at 29%.
1.4 The correct answer is option [2] as this statement is false.
Tastes and preferences are determinants of demand. When the desire to buy a good
increases, it increases the demand for that good, which is illustrated by a rightward shift
of the demand curve. When the desire to buy a good decreases, it decreases the demand
for that good, which is illustrated by a leftward shift of the demand curve.
1.5 The correct answer is option [1] as the statement is true.
Improvements in technology lead to economies of scale in production, reducing the
amount of labour needed to make the pasta and total production costs. This ultimately
reduces the equilibrium price paid by consumers. The improvement in technology is
reflected in an increase in supply. We illustrate the increase in supply with a rightward
shift of the supply curve. When the supply curve shifts to the right, this results in a
decrease in the equilibrium price in that market.
1.6 The correct answer is option [1].
Scarcity is the best term to describe the basic economic problem, namely that resources
are insufficient to meet people’s needs and wants.
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