ECS1501 Exam Pack LATEST UPDATED 100%VERIFIED

ECS1501 Exam Pack LATEST UPDATED 100%VERIFIED 1a) In the market for milk two things happen simultaneously: first, due to increased subsidies from government, there was an increase in the number of dairy farmers. Second, due to unfavourable economic growth, the average income per household has decreased. The effect of the subsidies is larger than the effect of the decreased income per household. Draw the market for milk and show the all changes. (5) (1b) Critically discuss your answer in question 1a, explaining the curves and making reference to any changes. Question 2 (2) Calculate the equilibrium quantity and price if the quantity demanded can be represented by the = 1800 + 0,6 and quantity supplied can be represented by = 7200 − 0,2 . Question 3 (6) (3a) When a local shop, called Burger Boet, decreases the price of hamburgers from R40 to R35, the quantity of the hamburgers demanded increases from 800 to 1 150. What is the price elasticity of demand for a burger at Burger Boet? (3b) How can Burger Boet increase its total revenue made from hamburgers, based on the price elasticity of the demand for hamburgers? Question 4 (6) (4a) When Sophie’s income increases from R12 000 to R16 000 per month, the quantity of petrol demanded for her car increased from 40 litres to 45 litres per month. Calculate Sophie’s income elasticity of demand for petrol. (4b) Based on Sophie’s income elasticity of demand for petrol, explain what type of good petrol is. Question 5 (5) The following table shows some of th