Assessment 4
Started on Friday, 11 October 2024,
State Finished
Completed on Friday, 11 October 2024,
Time taken
Marks 30.00/30.00
Grade 100.00 out of 100.00
Question 1
If average cost increases as output rises, all else equal, the cost function exhibits
diseconomies of scale.
Select one:
True
False
Feedback
The correct answer is 'True'.
Question 2
A small city has a number of hot dog stands operating throughout the CBD area.
Suppose that each vendor has a marginal cost of R1,50 per hot dog sold and no
fixed cost. Suppose the maximum number of hot dogs that any one vendor can sell
is 100 per day.
If a hot dog is priced at R2, how many hot dogs would each street vendor want to
sell per day?
a.
0
b.
100
c.
1
, 2025 – ECS2601 – ASSESSMENT 4 – EXPECTED Q&A
75
d.
50
Feedback
Your answer is correct.
Since MC = R1.50 and the price is R2.00, each vendor will want to sell as many hot
dogs as possible, which becomes 100 per day.
The correct answer is:
100
Question 3
When the government provides a subsidy for a product, this will ...
a.
Be a government cost.
b.
Encourage overproduction.
c.
Increase Producer Surplus
d.
All of the options are true.
Feedback
Your answer is correct.
The correct answer is:
All of the options are true.
Question 4
A price ceiling usually result in a deadweight loss.
2
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