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2025 - ECS2601 - ASSESSMENT 1 - QUESTIONS AND ANSWERS - SEMESTER 1 R85,33
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Exam (elaborations)

2025 - ECS2601 - ASSESSMENT 1 - QUESTIONS AND ANSWERS - SEMESTER 1
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  • January 7, 2025
  • 39
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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2025 – ECS2601 – ASSESSMENT 1 – EXPECTED Q&A



Assessment 1
Started on Thursday, 8 August 2024,
State Finished
Completed on Thursday, 8 August 2024,
Time taken
Marks 20.00/20.00
Grade 100.00 out of 100.00


Question 1
A decrease in the price of a product from R5 to R2 causes the quantity demanded to
increase from 100 to 200 units. Using the arc elasticity of demand, the price elasticity
of demand is …

a.
– 1.29

b.
0.77

c.
– 0.82

d.
– 0.58

Feedback
Your answer is correct.

Q1 = 100, P1 = 5

Q2 = 200, P2 = 2

Price elasticity of supply = (% change in Q)/ (% change in P)

EP = Q2 - Q1/Q1 + Q2)/2 ÷ P2 - P1/(P1 + P2)/2

= 200 - 100/(100 + 200)/2 ÷ 2 - 5/(5 + 2)/2

= 100/150 ÷ 3/3.5

= -0.667/0.86

1

, 2025 – ECS2601 – ASSESSMENT 1 – EXPECTED Q&A


= 0.77


The correct answer is:
0.77



Question 2
An indifference curve can be upward sloping.

Select one:
True
False

Feedback
True. A set of indifference curves can be upward sloping if we violate the assumption
of more is preferred to less. When a set of indifference curves is upward sloping, it
means one of the good is “bad” so that the consumer prefers less of that good rather
than more.



The correct answer is 'True'.



Question 3
Indifference curves are convex to the origin because of…

a.
the assumption that more is preferred to less.

b.
transitivity of consumer preferences.

c.
the assumption of completeness.

d.
the assumption of diminishing MRS.

Feedback
Your answer is correct.

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