Economics Answers

Quantity Chicken pieces Pies
MU MU/P (R4) MU/P (R2) MU MU/P (R4)
1 32 8 16 48 12
2 24 6 12 40 10
3 16 4 8 32 8
4 12 3 6 16 4
5 8 2 4 12 3
If you have R20 to spend on chicken pieces and pies how many chicken pieces will you consider buying to reach maximum satisfaction if the price is R4 per chicken piece and R4 for a pie?
1. 1
2. 2
3. 3
4. 4
5. 5

If the price elasticity of beef is greater than the price elasticity of coffee, it means that households are
1. more responsive or sensitive to a change in the price of beef than to a change in the price of coffee
2. more responsive or sensitive to a change in the price of coffee than to a change in the price of beef
3. more responsive or sensitive to a change in the demand for coffee than to a change in the demand for beef
4. more responsive or sensitive to a change in the demand for beef than to a change in the demand for coffee

Given the price of goods and services, which of the following indicates consumer equilibrium?
1. The consumer spends his or her income in such a way that he or she attains the highest possible marginal utility
2. The consumer spends his or her income in such a way that the weighted marginal utility (marginal utility per rand) is the same for the goods
3. The consumer spends his or her income that he or she attains the lowest possible total utility
4. The consumer spends his or her income in such a way that the weighted marginal utility (marginal utility per rand) is at its lowest

If a 10% increase in income causes a 20% increase in the quantity demanded for a good or service. It can be concluded that:
1. the price elasticity of the good or service is greater than one
2. the income elasticity of the demand for the good or service is negative
3. the good or service is a necessity
4. the good or service is a luxury good

Calculate the money multiplier from the following information:
Currency drain ratio: 20% Reserve ratio: 10% Deposit: R60 000

If ___ increases, both the interest rate and the quantity increase/s. When ___ increases, the interest rate drops and the quantity increases.

How can the South African Reserve Bank can increase the quantity of money available

9. To be considered part of M3, deposits need to be held:
a) longer than 5 years.
b) longer than 6 months.
c) longer than 30 days.
d) All of the above.

which one is correct?

7. Financial markets are not bound by borders and mobility of capital creates a single real interest rate. Why do interest rates then differ between countries?

6. The crowding out effect refers to how a government budget deficit ___ the demand for loanable funds. This leads to ___ real interest rates that ___ investment.