Exam (elaborations)
Exam (elaborations) ECS1500-Economics
- Course
- ECS1500-Economics
- Institution
- ECS1500-Economics
Exam of 34 pages for the course ECS1500-Economics at ECS1500-Economics (ECS1500-Economics)
[Show more]
Seller
Follow
Content preview
ECS1500 –ECONOMICS EXAM
PACK 2024
QUESTIONS AND
ANSWERS
FOR ASSISTANCE CONTACT:
mitanoisylvia@gmail.com
, lOMoARcPSD|47080728
ECS1500
Assessment 6 FIRST ATTEMPT
Question1
Correct
Mark 2.00 out of 2.00
Flag question
Question text
“Market failure” can be described as a situation in which ____________.
Select one:
a.
one company decides to buy all available coal in a country, resulting in a scarcity of this
resource for other buyers.
b.
government imposes progressive taxes in order to indirectly redistribute income.
c.
the price of agricultural goods falls due to excess supply when harvests are good.
d.
the “free market outcome” is NOT efÏcient.
Feedback
Incorrect. The correct answer is that the “free market outcome” is not efÏcient.
Market failure can be defined as the situation where the market does not result in the
efÏcient allocation of resources. Therefore, this is the correct answer.
Although it may not be a desirable alternative, if one buyer buys all coal and is willing to
pay the price that the market asks, this can still not be regarded as a market failure. If
the market works properly, more suppliers will enter the market to supply the need of the
other potential buyers. Therefore, this is not the correct answer.
Due to high supply, prices fall. This will ensure a higher quantity demanded, so that the
market can clear. If the prices do not fall, the result will be stock that cannot be sold. In
the case of agricultural goods this is not a desirable situation as it can result in losses if
the goods cannot be stored and go bad. Therefore, this is also not market failure but
again actually an example of the market operating efÏciently.
Unequal distribution of income may be regarded as an undesirable outcome of a market
economy. However, the steps taken to rectify the situation are not market failure, but
policy actions.
Market failure can be defined as the situation where the market does not result in the
efÏcient allocation of resources.
Although it may not be a desirable alternative, if one buyer buys all coal and is willing to
pay the price that the market asks, this can still not be regarded as a market failure. If
the market works properly, more suppliers will enter the market to supply the need of the
other potential buyers.
Due to high supply, prices fall. This will ensure a higher quantity demanded, so that the
market can clear. If the prices do not fall, the result will be stock that cannot be sold. In
, lOMoARcPSD|47080728
the case of agricultural goods this is not a desirable situation as it can result in losses if
the goods cannot be stored and go bad. Therefore, this is also not market failure but
again actually an example of the market operating efÏciently.
Unequal distribution of income may be regarded as an undesirable outcome of a market
economy. However, the steps taken to rectify the situation are not market failure, but
policy actions.
The correct answer is: the “free market outcome” is NOT efÏcient.
Question2
Incorrect
Mark 0.00 out of 2.00
Flag question
Question text
Mr B is 30 years old. Suppose that Mr B received a salary of R500 000 per year. The tax
bracket into which Mr B falls is taxed as follows: R93 135 + 36% of taxable income
above R393 200.
Mr B's average tax rate (rounded to two digits after the decimal) is…
Select one:
a.
26,32%
b.
not possible to calculate.
c.
7,69%
d.
36,00%
Feedback
Your answer is incorrect.
Mr B earns R500 000 per year. On the first R393 200 Mr B pays R93 135 tax. On the rest
of his income (R500 000 – R393 200 = R106 800) he pays 36%. We can calculate the
amount of tax that he pays on this amount of R106 800 as follows:
The correct answer is: 26,32%
Downloaded by sylvia mitanoi (mitanoisylvia@gmail.com)
, lOMoARcPSD|47080728
Question3
Incorrect
Mark 0.00 out of 2.00
Flag question
Question text
If South Africa has a comparative advantage over Zimbabwe in the production of
blankets, this means that …
Select one:
a.
South Africa can produce more blankets than Zimbabwe
b.
South Africa can sell more blankets than Zimbabwe
c.
South Africa can produce blankets at a lower cost than Zimbabwe with a given amount
of resources
d.
South Africa consumes more blankets than Zimbabwe
Feedback
Your answer is incorrect.
Comparative advantage is the ability of one country to produce a commodity (blankets)
at a lower cost within a certain period compared with another country (see section
10.2).
Comparative advantage does not necessarily imply absolute advantage. Absolute
advantage is the ability of one country to produce more of a particular commodity, in
this case blankets, within a certain time than another country.
Comparative advantage has to do with producing goods, not consuming and selling of
goods.
The correct answer is: South Africa can produce blankets at a lower cost than
Zimbabwe with a given amount of resources
Question4
Correct
Mark 2.00 out of 2.00
Flag question
Question text
Question 18 is based on the following diagram:
Downloaded by sylvia mitanoi (mitanoisylvia@gmail.com)
The benefits of buying summaries with Stuvia:
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
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mitanoisylvia. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R46,84. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76799 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now