Economics Answers

Given GDP at market price=12000, depreciation = 1500,subsidies =300
Calculate NDP at factor cost

Using the relevant diagram(s), illustrate and explain the effect of a price floor on a perfectly competitive firm?

Indicate why differentiation is made between financial assets and non financial assets?

illustrate and explain two market mechanisms that are used for controlling pollution as an externality.

Indicate why differentiation is made between current assets and non-current assets

Consider the consumption function below and answer the questions that follow: C= 40 + 0.25YD

1.1. Sketch the above function on a graph (5) 1.2. What is the value of autonomous expenditure? (2) 1.3. What is the gradient of the consumption function? (2) 1.4. What is the value of total consumption if disposable income is R2500?

Which of the following is true of profit maximising level of employment in a perfectly competitive labour market

(1) the marginal revenue product equals the value of marginal product
(2) the marginal revenue product equals the marginal cost of labour
(3) the marginal product equals the marginal revenue product
(4) the marginal product equals the marginal cost of labour

Firm X Strategy
High-price Low-price
High-price X = $200
Y = $200 X = $250
Y = $ 50
Low-price X = $ 50
Y = $250 X = $ 50
Y = $ 50


Firm Y Strategy


3.1. Situation 1: Each firm chooses a high-price strategy. Result: Each firm will earn $______ million in profit for a total of $______ million for the two firms.
3.2. Situation 2: Firm X chooses a low-price strategy while Firm Y maintains a high-price strategy. Result: Firm X will earn $_______ million and Firm Y will earn $_______ million. Compared to Situation 1, Firm X has an incentive to cut prices because it will earn $_______ million more in profit and Firm Y will earn $_______ million less in profit. Together, the firms will earn $_______ million in profit, which is $_______ million less than in Situation 1.

Why it is important to differentiate between a change in demand and a change in quantity demanded

Use diagram to distinguish , clearly between a change in demand and a change in the quantity demanded