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Microeconomics
Graphically illustrate and explain the impact of de-industrialisation on the market for Arcelor Mittal.
Microeconomics
Government is proposing to set up another firm to compete with Arcelor-Mittal. Show, using the theory of the firm, why this proposal may not be viable.
Microeconomics
Graphicall illustrate and explain the impact of Eskom’s electricity buy-back programme on the performance of the economy
Microeconomics
Graphically illustrate and carefully explain the impact of Eskom’s buy-back programme on the market for commercial coke.
Microeconomics
Tom is a full-time lecturer at a private higher education institution and is considering a career in
carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time
and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he
were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the
employment conditions at the higher education institution he works for, Tom can negotiate the number of
days he works at and will receive a rate of remuneration based on the number of days worked.
Question 1
1.1 Construct a production possibility frontier to illustrate Tom’s earnings potential between the two
careers if initially he was not working as a carpenter, then he worked one week per month, then two,
then three and finally four weeks per month (assuming only four weeks in a month).
carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time
and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he
were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the
employment conditions at the higher education institution he works for, Tom can negotiate the number of
days he works at and will receive a rate of remuneration based on the number of days worked.
Question 1
1.1 Construct a production possibility frontier to illustrate Tom’s earnings potential between the two
careers if initially he was not working as a carpenter, then he worked one week per month, then two,
then three and finally four weeks per month (assuming only four weeks in a month).
Microeconomics
2. The demand and Supply Schedules for potato chips are:
Price(rand per bag) Quantity demanded(millions of bags a week) Quantity Supplied(millions of bags a week)
5 160 130
6 150 140
7 140 150
8 130 160
9 120 170
10 110 180
a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity. (10 marks)
b. if the price is R6 a bag, is there a shortage or a surplus and how does the price adjust?
Price(rand per bag) Quantity demanded(millions of bags a week) Quantity Supplied(millions of bags a week)
5 160 130
6 150 140
7 140 150
8 130 160
9 120 170
10 110 180
a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity. (10 marks)
b. if the price is R6 a bag, is there a shortage or a surplus and how does the price adjust?
Microeconomics
6. Paul Mabaso’s average utility from the consumption of 8 chocolates is 25 utils per slab. If the marginal utility of the 9th slab is 20 utils, will his average utility increase, decrease or stay constant if he consumes 9 slabs? Explain. What will happen to his total utility? (4)
Microeconomics
4. You are still the CEO of Metrorail. Analysts have determined that the price elasticity of 1,4 is a weighted average figure. During peak hours in the morning and evening the price elasticity of demand is 0,8 and during the rest of the day it is 2,6. How would this information affect your pricing strategy? (4 marks)
Microeconomics
Tom is a full-time lecturer at a private higher education institution and is considering a career in
carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time
and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he
were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the
employment conditions at the higher education institution he works for, Tom can negotiate the number of
days he works at and will receive a rate of remuneration based on the number of days worked.
1.2 Discuss the underlying assumption of the shape of the above drawn diagram and comment on how
likely this could be true with respect the above scenario.
carpentry. He wishes to pursue a career in carpentry (a childhood dream) which he has studied part-time
and is now equipped to take on clients. In his current position he earns a rate of R1000 per day and if he
were to pursue a career in carpentry he would earn R800 per day. Due to the flexibility of the
employment conditions at the higher education institution he works for, Tom can negotiate the number of
days he works at and will receive a rate of remuneration based on the number of days worked.
1.2 Discuss the underlying assumption of the shape of the above drawn diagram and comment on how
likely this could be true with respect the above scenario.
Microeconomics
A firm rents light bulbs to consumers. The firm covers the cost of the light bulb and replacing it every time it burns out. The interest rate is 18%. The cost of producing a light bulb is √N where N is the number of years the light bulb lasts.
In the following cases, what is the firm's present value cost of providing a lightbulb to a consumer and replacing it everytime it burns out forever?
(a)Using light bulbs that last 1 year ?
(b)Using light bulbs that last 2 years ?
(c)Using light bulbs that last 10 years ?
In the following cases, what is the firm's present value cost of providing a lightbulb to a consumer and replacing it everytime it burns out forever?
(a)Using light bulbs that last 1 year ?
(b)Using light bulbs that last 2 years ?
(c)Using light bulbs that last 10 years ?
