Exam (elaborations)
ECS1500 ASSIGNMENT 3 SEMESTER 2 2023
- Course
- Economics 1500 (ECS1500)
- Institution
- University Of South Africa (Unisa)
ECS1500 ASSIGNMENT 3 SEMESTER 2 2023
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ECS1500 Assignment 03 Semester 02 2023Student number: …54949815…………………………………………………………………………………….
Name: MXOLISI MELUSI MCHUNU……
Date submitted: ……26/08/2023……………………………………………………………………………………
Word count: ……1058…………………………………………………………………………………………
Question 1 (5 marks) Maximum word count: 100 words
Answer 1:
If the price of knitting needles decreases due to new technology, it will make knitting needles more
affordable and attractive to consumers. As a result, the demand for knitting needles will increase.
Knitting needles and crochet hooks are substitutes in consumption, meaning that they can be used
interchangeably for knitting and crocheting projects. Therefore, as the demand for knitting needles
increases, some consumers of crochet hooks may switch to using knitting needles instead. This will
decrease the demand for crochet hooks. Consequently, the market for crochet hooks will experience
a decrease in both the equilibrium price and quantity. The decrease in the price of knitting needles
due to new technology will likely have an impact on the market for crochet hooks.Firstly, as knitting
needles become cheaper, some consumers who previously used crochet hooks may switch to knitting
needles. This is because the lower price of knitting needles makes them a more attractive option for
those who are price-sensitive. As a result, the demand for crochet hooks may decrease.Secondly, the
decrease in the price of knitting needles may also lead to a decrease in the price of knitted products.
This could make knitted products more affordable and increase their demand. As a result, the demand
for crochet hooks, which are used to create crocheted products, may further decrease.Overall, the
decrease in the price of knitting needles is likely to negatively impact the market for crochet hooks,
leading to a decrease in demand for crochet hooks.
Question 2 (5 marks) No words allowed, only a diagram with annotations
Answer 2:
The diagram should show the demand and supply curves for computers in South Africa. The demand
curve should be downward sloping, indicating that as the price of computers decreases, the quantity
demanded increases. The supply curve should be upward sloping, indicating that as the price of
computers increases, the quantity supplied increases.With the implementation of new technology
that makes it cheaper to produce computers, the supply curve for computers in South Africa will shift
to the right. This means that at any given price, there will be a higher quantity supplied. As a result,
the equilibrium quantity of computers will increase, as indicated by an arrow pointing to the right.
The equilibrium price of computers will decrease, as indicated by an arrow pointing downward. To
illustrate the effect of implementing new technology on the market for computers in South Africa,
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