Hallo neel please correct
1
QUESTION 1
Answer the following questions Only write down the numbers ex 1.1 A.
Study TABLE 1 and answer the questions that follow:
TABLE 1
PRICE (in Rand) QUANTITY DEMANDED QUANTITY SUPPLIED
2 160 80
4 140 100
6 120 120
8 100 140
10 80 160
12 60 180
1.1 In TABLE 1, the equilibrium price is …
A R1
2
B R
4
C R
6
D R
8
1.2 A Market shortage will exist if …
A the price is above the equilibrium position
B the price is below the equilibrium position
C there is too many suppliers
D ALL of the above-mentioned
1.3 The additional utility derived from consuming an additional unit of a product is referred to
as .. . utility…
A diminishing
B marginal
C total
D average
1.4 A point inside the production possibility curve represents …
A an inefficient use of resources
B unemployment
C underemployment
D ALL the above-mentioned
1.5 If an increase in the price of product A causes the demand curve for product B
to shift to the right, then …
A A and B are compliments
B the price of A must be higher than the price of B
C B must be a normal product
D A and B are substitutes
1.6 If the consumer ‘s demand for fish increased because of an increase in the price of lamb,
these products are examples of …
A inferior
B normal
C substitute
D complimentary
user
D:20120903231345+02’00’2012/09/03 11:13:4
5
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1.4 D. correct answer
Q1 = 9/10
user
D:20120903233317+02’00’2012/09/03 11:33:1
7
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grand total 74/150
= 49 %
2
1.7 If the price of a product increases it causes a …
A shift of the demand curve to the right
B movement along the demand curve
C decrease in the elasticity of demand
D shift of the demand curve to the left
1.8 The concept opportunity costs …
A can be applied to the analysis of any decision-making process
B is relevant only to Economics
C refers only to actual payments and income
D applies to consumers but not firms
1.9 The fact that a decline in the price of a product causes producers to reduce the quantity
of the product
A the law of supply
B the law of demand
C a change in supply
D a change in demand
1.10 When economists speak of normal goods they mean …
A manufactured goods with no defects
B goods people usually buy
C goods of which the marginal utility decrease as consumption increases
D goods of which the quantity demanded increases with rising incomes
(10X1=10)
(10)
QUESTION 2
Use the information in the table below and answer the questions that follow:
TABLE 2
Price per square metre in
Rand
: Quantity demand of solar
panels per year in
.. thousands Quantity supplied of solar panels per year in thousands
100 5 40
80 15 25
70 20 20
60 25 15
40 40 10
2.1 Illustrate the demand and supply schedule graphically on one graph. (11)
2.2 user
D:20120903231500+02’00’2012/09/03 11:15:00
PM
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you should have included the number
in table on the respective axis on your
graph
3
Determine the equilibrium price and quantity from the graph.
(2) R70
2.3 Calculate the elasticity of supply if the price of solar panels increases from R80
to R100 per square meter.
Elasticity of Supply = % ∆ in quantity supplied / % ∆ in price
= 60%/25% = 2.4
The quantity demanded increases with 10 units at each price level.
2.5
What is the NEW equilibrium price?
(1) If the price increases from 70 to 80, the quantity demanded drops to 15
2.6
What is the NEW equilibrium quantity?
(1)
(25)
QUESTION 3
3.1 Explain the 5 types of price elasticity of demand with the help of graphs.
(5×3=15)
The five types of elasticity of demand:
1. Perfectly elastic demand: any increase in price causes the demand of the product
to drop to zero.
2. Perfectly inelastic demand: a change in the price level of the product does not
affect the demand at all.
user
D:20120903231733+02’00’2012/09/03 11:17:33
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equilibrium qtty is 20 you havent
included it
Q2 = 15/25
4
3. Relatively inelastic demand: the change in quantity demanded is less than the
change in the price.
4. Relatively elastic demand: the change in quantity demanded is more than the
change in price.
5. Unitary elastic demand: the change in the price of the good is equal to the change
in the quantity demanded.
3.2.1 Study the graph below and answer the questions that follow.
Apples
L Bananas
3.2.1 What are curves 1,, l2 and l3 called? (2)
3.2.2 The curves are known as indifference curves
What do these curves represent?
(2) The curves determine the utility of a basket of goods. At any point on the curve,
the consumer is indifferent: he has the same utility along the entire curve.
3.2.3
What is line LK called?
(2)
3.2.4
Which point represents consumer equilibrium explains? Explain.
(4) The point where demand curve and supply curve interact is the consumer
equilibrium.
(25)
QUESTION 4
Indicate whether the following are characteristics of a free-market system or a command
system. Write only the correct answer next to the question number, for example 4.6 Free-
market.
4.1 The central government owns and controls almost all means of production. Command
Market
4.2 The price mechanism plays an important role in the solution to economic problems. Free
Market
4.3 The consumer does not buy goods that he/she dislikes. Free Market
4.4 Expected profits and possible losses are the only reason for the expansion of decreasing
of economic activities. Free Market
4.5 The price of goods is fixed by the state. (5 X 1 = 5) (5) Command Market
QUESTION 5
5. Use each scenario below to indicate graphically how the equilibrium price and – quantity of
motor vehicles will change. Also provide a brief motivation for each graph
5.1.1 The interest rate in the South African economy has decreased by 4,5% during the past
six months
user
D:20120903231950+02’00’2012/09/03 11:19:50
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the question says with the help of
graphs, where are your graphs? Q3=
12/25
user
D:20120903232014+02’00’2012/09/03 11:20:14
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Q4 = 5/5
5
1
0%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Jan Feb Mar Apr May Jun
South African Output decreasing from 9% to 4.5% over the six month period.
5.1.2 The motor manufacturers increase their investment in capital goods
35%
30%
25%
20%
15%
10%
5%
0%
2010 2011
Increase in investment in capital goods from 20% to 30% y-o-y.
5.1.3 Kumba has increased the price of steel by 15% and as a result they are charging
similar prices for steel than their international competitors
6
G
D
P
%
S
te
e
l
P
ri
c
e
i
n
U
S
D
Steel Price in USD
1200
1150
1100
1050
1000
950
900
1 2
Kumba increased the steel prices from 1,000 USD per tonne to 1,150 USD per tonne
5.1.4 The USA,Europe and Japan are expected to record increases in their economic growth
rates during 2010 (4×3=12)
(12)
6%
5%
4%
3%
2%
1%
0%
200
9
US and Japan GDP Grow th Rates
US and Japan GDP growth rate increases from 4% to 5% in 2010.
QUESTION 6
6.1.1 Choose the statements from COLUMN B to match the term in COLUMN A.
Write only the letter ( A- J) next to the question number (6.1.1. – 6.1.10.) for example 6.1.1.A.
COLUMN A
6. 1 .1 Monopoly
6.1. 2 Short-term equilibrium
6.1 .3 Physical needs
user
D:20120903232345+02’00’2012/09/03 11:23:45
PM
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you did not understand the question.
you merely had to used a simply
downward sloping linear demand curve
and upward sloping supply curve to
show the scenarios!!!!!1
Q5 =0/12
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6.1.4 Perfect compet itive market
6.1.5 Marginal utility
6.1 . 6 Income elasticity
6.1 .7 Public sector
6.1.8 Macro-economics
6.1.9 Micro-economics
6 1 .10 E conomic growth
COLUMIB
A additional satisfaction from an additional unit of a product consumed
B sensitivity of demand in relation to income
C MC= lv11
D any process that results in a quantitat ive long-term change in an economic structure
E a market where the seller is a price taker
F that section of the economy that is controlled an d managed by the state on a local or
national level
G a study of broad aggregates that influences the whole economy
H deals With aspects such as behav1our of consumers, changes in tastes and habits of
consumers and price determination
need for food clothing , housing
J the supply of a commodity or service is controlled by a single person or group of people to
such an extent that there can be little or no competition from anyone else.
(10X1=10)
6.2 Name 4 characteristics of a perfect competitor.
6.3 Name 4 characteristics of a monopolist.
(4 X 1 = 4) (4 X 1 = 4) (18)
1-J
2-C
3-I
4-E
5-A
6-B
7-F
8-G
9-H
10-D
QUESTION 7
7.1 Study the following graph and answer the questions that follow:
FIGURE2
Capital
goods
40
100 350
Consumer goods (‘000)
7.1.1 If 40 thousand units of capital goods are currently produced, calculate the opportunity
cost to produce 80 thousand units of capital goods. (Show ALL calculations.) (4)
user
D:20120903232454+02’00’2012/09/03 11:24:54
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Q6 = 10/18
where is 6.2 and 6.3
8
Ans.
At 40000 units of Capital Goods= 350000 Units of Consumer Goods were produced
At 80000 units of Capital Goods= 100000 Units of Consumer Goods were produced
This means that to produce additional 40000 units of capital goods company has to
forgo 250000 units of Consumer Good which is the opportunity cost for producing
80000 units of Capital Goods.
7.1.2 What does point X represent? (2)
7.1.3 Which point on the graph can only be attained through economic growth? (2)
7.1.4 What does the production possibility curve represent? (2)
Ans. Production Possibilty curve represent various possibilities of production that
can be achieved by the given resources.
7.2
7.2.1 Calculate the values of (a) , (b) and (c). (6)
a. 50
b. 120
c. 20
7.2. 2 Which law is represented or illustrated by COLUMN 3?
Ans. Diminishing Marginal Utility
7.3 Compare the perfect competitor and monopolist with one another. Use graphs.(20)
Ans. Graphs to be prepared
7.4 ….. Is the basic economic problem. (2)
Ans. Scarcity of resources
(40)
QUESTION 8
Use the information in the table below to answer the questions that follow:
QUANTITY TOTAL COST FIXED COST VARIABLE COST AVERAGE COST
PROFIT
0 100 100 0 – -100
1 130 100 30 130 -90
2 155 100 55 77.5 -75
3 175 100 75 58.33 -55
4 196 100 96 49 -36
5 220 100 120 44 -20
6 250 100 150 41.67 -10
7 284 100 184 40.57 -4
8 324 100 224 40.5 4
9 370 100 270 41.11 10
8.1.1 Calculate the variable cost,average variable cost and average cost in tableform (10)
Done in table above.
8.1.2 Determine where profit will be maximised in the short-run according to the marginal
approach if the product sells at R40,00 per unit (2)
8.1.3 Illustrate the marginal approach and indicate on the graph the areas that represent an
economic loss,normal profit and an economic profit (3}(15)
user
D:20120903232659+02’00’2012/09/03 11:26:59
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I am meant to believe you omitted the
graphs. Q7= 20/40
user
D:20120903233003+02’00’2012/09/03 11:30:03
PM
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where is the MC, the average cost is
wrong because it cant be a negative
value. AC= TC/Q
I do not see the answers to 8.2 & 8.3
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