100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
ECS2601 Assignment 2 2021 AS PER UPDATED TUTORIAL LETTER (To be used as a guideline only) $2.76
Add to cart
Quickly navigate to
Preview
  2.  
  3. University Of South Africa (Unisa)
  4.  
  5. ECS2601 - Microeconomics (ECS2601)

Other

ECS2601 Assignment 2 2021 AS PER UPDATED TUTORIAL LETTER (To be used as a guideline only)
 8 views  0 purchase
  • Course
  • ECS2601 - Microeconomics (ECS2601)
  • Institution
  • University Of South Africa (Unisa)

This document includes the assignment questions, answers and explanations. 100% Mark.

Preview 2 out of 11  pages

Document information

  • September 21, 2021
  • 11
  • 2021/2022
  • Other
  • Unknown

Subjects

  • ecs
  • ecs2601
  • ecs2601 2021
  • ecs2601 assignment 2

Written for

  • University of South Africa (Unisa)
  • ECS2601 - Microeconomics (ECS2601)
All documents for this subject (131)

Seller

avatar-seller
aj107

Reviews received

Content preview

Microeconomics II
ECS2601
Department of Economics
Assignment 02 for 2021
AS PER UPDATED TUTORIAL LETTER TUT 001/3/2021
Learning Units 8 to 12
Unique Number: 700643
Due Date: 7 June 2021




This assignment contributes 50% towards your semester mark.
Please ensure that this assignment reaches the university before the due date.

Answer all questions on a mark-reading sheet.

Questions 1 to 20 of the assignment are MULTIPLE-CHOICE questions.
In each question, select the most correct option.


1. A firm’s primary objective is

[1] to maximise profits and minimise costs.
[2] to minimise total costs and improve output.

, [3] to maximise total revenue and minimise loss.
[4] to minimise marginal cost and maximise marginal revenue.

Answer:

The firm has a dual objective since profit-maximization would constitute cost-minimization.

2. Khalid used to be a DJ earning R500 000 a year, but he now works as a plumber. Each
year, his direct costs are R185 000. This includes the annual electricity, water and levy
bill of R82 000, and annual rent of R75 000. He has R120 000 of financial capital tied up
in the business throughout the whole year, and the market interest rate is 8.5%. His
annual revenue as a plumber is R900 000. Which of the following statements is correct?

[1] Khalid is breaking even.
[2] Khalid is making economic profit of R95 000.
[3] Khalid is making economic profit of R204 800.
[4] Khalid is making economic loss of R62 000.

Answer:

Economic profit is:

𝐸𝑃 = 900,000 − 185,000 − (500,000 + 120,000 × 0.085) = 204,800.

Economic profit equals total revenue minus total costs. It is important to note that total costs
include implicit and explicit costs. In this case, total revenue is R900 000. Implicit costs are R510
200. Implicit costs are all the costs forgone such as the salary he used to earn as a DJ and the
8.5% interest income forgone on the financial capital. The explicit costs are R185 000. Hence, the
profit is R204 800.

Use the diagram below for a firm operating in a perfectly competitive market and answer the
question that follows.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller aj107. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $2.76. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

52355 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$2.76
  • (0)
Add to cart
Added