Exam (elaborations)
ECS2601 - ASSESSMENT 2 - QUESTIONS AND ANSWERS - SEMESTER 2 - 2024
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2024 – S1 – ECS2601 – ASSESSMENT 2 – Q&AAssessment 2
Started on Tuesday, 2 April 2024,
State Finished
Completed on Tuesday, 2 April 2024,
Time taken
Marks 19.00/20.00
Grade 95.00 out of 100.00
Question 1
Imagine that there are only three consumers in a particular market for shirts: Thando,
Irene and Portia. We are interested in the demand for shirts. The demand equations
for the three consumers are as follows:
If the price of one shirt was to increase from R50 to R100, whose quantity demand of
shirts will fall the most or even demand no shirts at all.
Irene: Qd = 200 - 2P
Thando: Qd= 130 - P
Portia: Qd = 280 - 2P
a.
Irene
b.
Thando
c.
Portia
d.
No consumer will purchase shirts as the price has doubled.
Feedback
Your answer is correct.
Substitute R100 into all the individual demand equations.
1
, 2024 – S1 – ECS2601 – ASSESSMENT 2 – Q&A
Irene: Qd = 200 - 2(100) = 0
Thando: Qd= 130 - (100) = 30
Portia: Qd = 280 - 2(100) = 80
Irene will demand 0 quantity of shirts.
Question 2
The magnitude of the subsitution effect and income effect in this graph reperesnts ...
a.
Giffen Good.
b.
Normal good.
c.
Inferior good.
d.
Complement goods.
2
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