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ECS2601 ASSESSMENT 3 SEMESTER 2 2023
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ECS2601 ASSESSMENT 3 SEMESTER 2 2023
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muzavazi47@gmail.com 0717513144 muzavazi47@gmail.comA price increase for salt is likely to lead to a Small income effect, small substitution effect.
Select one:
True
False
Average total cost reaches a minimum where it intersects average variable cost.
Select one:
True
False
Consider the following demand and supply functions:
Demand: Qd = 300 – 15P.
Supply: Qs = –150 + 60P.
What is the equilibrium price and output?
a.
P = R2 and Q = 540.
b.
P = R10 and Q = 150.
c.
P = R6 and Q = 210.
d.
P = R3.33 and Q = 200.
Question text
Suppose the price of flour, an ingredient used to make bread, increases. Which of the
following is true regarding the price and the quantity supply of bread.
a.
There will be an increase in the price of bread and an increase in the quantity supplied.
b.
There will be an increase in the price of bread and a decrease in the quantity supplied.
c.
There will be an increase in the price of bread and no change in the quantity supplied.
d.
There will be no effect on the price of bread and quantity supplied.
If a 2 percent increase in the price of ice cream causes a 4-percent decrease in the quantity
demanded, what is the elasticity of demand?
a. -0.5
b. -2
c. 2
d.0.5
Question text
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A decrease drop in the price of a product from R25,00 to R20,00 causes the
quantity demanded to increase from 1 500 to 2 000 units. Using the arc elasticity of demand,
the price elasticity of demand is … .
a.– 0.82
b.– 0.78
c. 0.77
d. – 1.29
A decrease in the price of a product from R50,00 to R40,00 causes the quantity demanded to
increase from 2 500 to 3 000 units. Using the arc elasticity of demand, the price elasticity of
demand is …
a.
0.78.
b. -0.82.
c.
-1.22.
d.
-0.69.
Given the subsistute effect and income effect of this nature. The two effects represents ...
a.
Normal good.
b.
Inferior Good.
c.
None of the options are correct.
d. Giffen Good.
Question text
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Terry has R140 to spend on two goods, shoes and shirts. If the price of a pair of shoes is
R35 per pair and the price of a shirt is R20 each, which one of the following
combinations is unaffordable to Terry?
a. 0 pairs of shoes and 7 shirts
b. 2 pairs of shoes and 4 shirts
c. 0 pairs of shoes and 0 shirts
d. 2 pairs of shoes and 3 shirts
Question text
For the demand curve, the quantity of the good is plotted on the horizontal axis and the
consumer’s income is on the vertical axis.
Select one:
True
False
Question text
When the income-consumption curve has a positive slope throughout its entire length, we
can conclude that
a. the good on the vertical y-axis is inferior.
b. both goods are normal.
c. the good on the horizontal x-axis is inferior.
d. both goods are inferior.
The demand for potatoes is: Qd = 120 -P
The supply of potatoes is: QS = 5P
What is the equilibrium quantity of books?
a. 100
b. 25
c. 75
d. 50
Consider the following graph. What is the Consumer surplus.
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