1 .If a maximum price is set below the equilibrium price,
[1] there will be a shortage.
[2] sellers will find it difficult to find willing
... [Show More] buyers.
[3] market equilibrium will occur despite government regulation.
[4] all buyers will be able to purchase their desired quantities.
3.4 If the government adopts a price floor policy for fish at a floor of R53/kg,
[1] both price and quantity sold will rise.
[2] both price and quantity sold will fall.
[3] price will fall and quantity will rise. [4] price and quantity will stay the same.
3.5 If the total revenue from the sales of a good rises by 10% when its price is increased by 10%, the
demand for the good must
[1] be perfectly price elastic. [2] be perfectly price inelastic.
[3] be unitary elastic.
[4] have a price elasticity of -1
3.6 If the price elasticity of demand for Omo washing powder is 3.0, a
drop in price leads to a rise in the quantity demanded.
[1] 12 per cent; 36 per cent
[2] 12 per cent; 4 per cent [3] R1 000; 3000-unit
[4] R1 000; 333-unit
Question 3.7 is based on the following table.
Price Quantity demanded
R1 100
R2 80
R3 60
R4 40
R5 20
3.7 The table above shows the demand schedule for ice cream cones. What is the price elasticity of demand when the price changes from R4 per ice cream cone to R5 per ice cream cone? (Use the formula for arc elasticity.)
[1] 0,33
[2] 1,00
[3] 1,15
[4] 3,00
3.8 The admissions policy of Makopani University of Technology is to admit any student who is willing to pay the university's tuition fees. In an effort to increase their total revenue, the board of the university decides to reduce tuition fees.
Apparently they
[1] are ignoring the law of demand.
[2] believe that the demand for an education from Makopani University of Technology is perfectly inelastic.
[3] believe that the demand for an education from Makopani University of Technology is inelastic.
[4] believe that the demand for an education from Makopani University of Technology is elastic.
3.9 The income elasticity of demand for a good measures the responsiveness of
to a change in .
[1] quantity demanded; price of a related good [2] quantity demanded; income
[3] demand; price of a good
[4] quantity demanded; price of a good
3.10 When the price of erasers increases from R1,50 to R2,50, the quantity demanded of pencils is unchanged. The cross elasticity of demand between erasers and pencils is because erasers and pencils .
[1] 1; are substitutes
[2] 0,5; are complements
[3] 0; are normal goods [4] 0; are unrelated
Duncan receives the following marginal utilities from the first four car washes that he buys each year: 20, 15, 10 and 5. If each car wash sells for R10, the marginal utility per Rand spent on the third car wash is
[1] 1
[2] 5 [3] 4,5 [4] 45
Question 3.12 is based on the following table showing Xoli's total utility from consuming candy bars and bubblegum.
Total candy bars consumed Total utility from consuming candy bars Total bubblegum consumed Total utility from consuming bubblegum
1 20 1 12
2 30 2 18
3 36 3 21
3.12 If Xoli's allowance is R12, the price of candy bars is R2 per unit and the price of bubblegum is R3 per unit, you would advise her to purchase
[1] 3 packs of bubblegum.
[2] 3 candy bars and 2 packs of bubblegum.
[3] 3 candy bars.
[4] 2 candy bars and 3 packs of bubblegum.
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