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Economics
QUESTION TWO [20]
2.1 Question 2.1.1 to 2.1.3 are based on the schedule below relating to the demand and supply
of mini chocolate bars:
Column A
PRICE (IN RANDS
AND CENTS)
Column B
QUANTITY
Column C
PRICE (IN RANDS
AND CENTS)
Column D
QUANTITY
R0.50 16 R0.50 0
R1.00 13 R1.00 1
R1.50 10 R1.50 4
R2.00 7 R2.00 7
R2.50 4 R2.50 10
R3.00 1 R3.00 13
2.1.1 State and motivate which columns represent:
2.1.1.1 The demand aspect (5)
2.1.1.2 The supply aspect (5)
2.1.2 List the equilibrium price and equilibrium quantity for mini chocolate bars according to
the schedule. Include in your answer the meaning of the equilibrium price and
equilibrium quantity. (5)
2.1.3 Assume that at the price of R1.00, the quantity of mini chocolate bars increases from
13 bars to 14 bars. Discuss one relevant factor that can cause this change. (
2.1 Question 2.1.1 to 2.1.3 are based on the schedule below relating to the demand and supply
of mini chocolate bars:
Column A
PRICE (IN RANDS
AND CENTS)
Column B
QUANTITY
Column C
PRICE (IN RANDS
AND CENTS)
Column D
QUANTITY
R0.50 16 R0.50 0
R1.00 13 R1.00 1
R1.50 10 R1.50 4
R2.00 7 R2.00 7
R2.50 4 R2.50 10
R3.00 1 R3.00 13
2.1.1 State and motivate which columns represent:
2.1.1.1 The demand aspect (5)
2.1.1.2 The supply aspect (5)
2.1.2 List the equilibrium price and equilibrium quantity for mini chocolate bars according to
the schedule. Include in your answer the meaning of the equilibrium price and
equilibrium quantity. (5)
2.1.3 Assume that at the price of R1.00, the quantity of mini chocolate bars increases from
13 bars to 14 bars. Discuss one relevant factor that can cause this change. (
Economics
QUESTION THREE [20]
3.1 Assess the category of goods according to income elasticity of demand that exhibits the
following elasticity coefficients for the goods specified:
3.1.1 Good X: Positive income elasticity; Ey = 1.6 (5)
3.1.2 Good Y: Positive income elasticity; Ey = 0.3 (5)
3.2 Discuss two (2) categories of price elasticity of demand. (10)
QUESTION FOUR [20]
3.1 Assess the category of goods according to income elasticity of demand that exhibits the
following elasticity coefficients for the goods specified:
3.1.1 Good X: Positive income elasticity; Ey = 1.6 (5)
3.1.2 Good Y: Positive income elasticity; Ey = 0.3 (5)
3.2 Discuss two (2) categories of price elasticity of demand. (10)
QUESTION FOUR [20]
Economics
4.1 Define the following cost curves according to the theory of the firm. Provide examples
wherever applicable:
4.1.1 Total fixed cost curve (4)
4.1.2 Total variable cost curve (4)
4.1.3 Long-run average cost curve (4)
4.2 Describe the demand curve of a perfectly competitive firm. (4)
4.3 Explain the nature of the goods produced by a monopolistically competitive firm.
wherever applicable:
4.1.1 Total fixed cost curve (4)
4.1.2 Total variable cost curve (4)
4.1.3 Long-run average cost curve (4)
4.2 Describe the demand curve of a perfectly competitive firm. (4)
4.3 Explain the nature of the goods produced by a monopolistically competitive firm.
The neutrality of money refers to the impact of_______________policy, which means that only___________ variables changes in the AS-AD model in the medium to long run
Economics
5.1 Analyse the reason relating to the money supply circulating in an economy as a factor
contributing to the downward sloping aggregate demand curve. (5)
5.2 Distinguish between the two main tools in the application of fiscal policy. (6)
5.3 Discuss one (1) problem associated with using gross domestic product as a measure of
economic growth. (4)
contributing to the downward sloping aggregate demand curve. (5)
5.2 Distinguish between the two main tools in the application of fiscal policy. (6)
5.3 Discuss one (1) problem associated with using gross domestic product as a measure of
economic growth. (4)
Economics
QUESTION FOUR [20]
4.1 Define the following cost curves according to the theory of the firm. Provide examples
wherever applicable:
4.1.1 Total fixed cost curve (4)
4.1.2 Total variable cost curve (4)
4.1.3 Long-run average cost curve (4)
4.2 Describe the demand curve of a perfectly competitive firm. (4)
4.3 Explain the nature of the goods produced by a monopolistically competitive firm. (4)
4.1 Define the following cost curves according to the theory of the firm. Provide examples
wherever applicable:
4.1.1 Total fixed cost curve (4)
4.1.2 Total variable cost curve (4)
4.1.3 Long-run average cost curve (4)
4.2 Describe the demand curve of a perfectly competitive firm. (4)
4.3 Explain the nature of the goods produced by a monopolistically competitive firm. (4)
Q1: https://www.youtube.com/watch?v=XUBeH7VQaFY
Watch the above YouTube link. The Case Study on “Starbucks”. According to your understanding, explain with diagrams and examples, what are the strategies Starbucks established to grow the business in all over the world. Also what are the challenges and hurdles Starbucks faced geographically and how “You” will make the strategies to solve those problems.
b. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
Watch the above YouTube link. The Case Study on “Starbucks”. According to your understanding, explain with diagrams and examples, what are the strategies Starbucks established to grow the business in all over the world. Also what are the challenges and hurdles Starbucks faced geographically and how “You” will make the strategies to solve those problems.
b. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
b. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
Suppose you borrow $100 today at an interest rate of 10 percent per year (paid at the end of each year). You put it into an investment that will give benefits of $60 per year for the next two years’ time (at the end of each year). In two years’ time, what will be the net benefit of your investment (the benefits minus the total costs, including interest costs).
explain why any firm maximises profit, or minimises losses, when marginal cost is equal to marginal revenue
