ECS2601 - ASSESSMENT 4 - EXPECTED QUESTIONS AND ANSWERS - 2024

ECS2601 – ASSESSMENT 4 – EXPECTED QUESTIONS AND ANSWERS - 2024


Started on Wednesday, 11 October 2023,
State Finished
Completed on Wednesday, 11 October 2023,
Time taken
Marks 24.00/30.00
Grade 80.00 out of 100.00


Question 1
Consumers are made better off when demand is relatively inelastic and supply
is relatively elastic

Select one:
True
False



Question 2
Every firm maximises profit when …

a.
marginal revenue equals marginal cost.

b.
total costs are minimised.

c.
average revenue equals average variable cost.

d.
average revenue equals average cost.



Question 3
Suppose the city decides to sell permits. What is the maximum price the
vendor would pay for a permit per day?

a.
R75,00

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, ECS2601 – ASSESSMENT 4 – EXPECTED QUESTIONS AND ANSWERS - 2024


b.
R50,00

c.
None of the options are correct.

d.
R100,00



Question 4
The benefit of a subsidy accrues mostly to consumers (producers) if the ratio
of the elasticity of demand to the elasticity of supply is large (small) in
absolute value.

Select one:
True
False



Question 5
A firm producing six units of output has an average total cost of R200 and has
to pay R300 to its fixed factors of production. The average variable cost is …

a.
R50.

b.
R300.

c.
R150.

d.
R200.



Question 6
If average cost increases as output rises, all else equal, the cost function
exhibits diseconomies of scale.


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