Microeconomics Answers

If total cost increases, the marginal cost is positive.

1. True

2. False

Using arc method calculate the elasticity of demand for oranges when the price

rises from $2 to $3 Price per orange, its demand reduces from 80 thousands oranges

to 70 thousands oranges. Interpret your answer in term of the farmer’s revenue.

Suppose 60 000 000 people are in the labour force, 23 000 000 people are employed in the public sector and 20 000 000 people are employed in the private sector. How many people are unemployed?

In the early 1970's the price of oil in the country rose by 176% and the quantity demanded fell by 25 %. What conclusion can you make about its demand?

Compute the equilibrium price of buko pie given the following equations :                              Qd = 750 - 15P Qs = -150 + 30P

determine the equilibrium price and quantity supplied if the market supply of an industry is given by p=2qs+4 and the market demand curve is Qd= 28-1/4p

According to the classical cash reserve system,

which of the following statements is/are true

regarding banks in South Africa?

(a) They are required to hold a minimum cash

reserve of 2,5% of their deposits.

(b) The level of the repo rate influences the interest

rate at which the banks provide credit to

individuals.

(c) The SARB provides cash reserves through

accommodation policy to the banks experiencing

liquidity shortage.

O a. (b)

O b. (a)

O c. (a) and (b)

O d. (c)

O e. (a), (b) and (c)

1. A cement factory recently lowered its price from $60 to $40. As it did, the number of cement bags sold increased from 240000 to 280000.

I) what is the cement factory elasticity of demand? Interpret the result intuitively.

II) given that elasticity, did it make sense for the cement factory to lower its price?

Which of the following factors will cause a movement along the AD curve?

a. The government decides to fund small businesses in Limpopo.

b. The minister of finance together with the panel decide to reduce taxes.

O d. The increase in fuel price, that results in an increase in the general price level.

O c. The central bank decides to increase the repo rate.

Within the AD-AS model, what will be the impact of expansionary demand management policy on the economy?

a. real output and the price level will increase, while unemployment decrease.

c. aggregate supply will decrease and the price level increase.

d. total production and employment will increase, while inflation decrease.

O b. aggregate demand will decrease and the price level increase.