, ECS2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025
(655050) - DUE 2 April 2025; 100% correct solutions and
explanations.
Question 1: (15 marks)
1.1 In microeconomics we need to make certain assumptions about the
preferences of consumers. Use real life examples to explain any two of
these assumptions. (4)
1.2 Critically evaluate why the marginal rate of substitution between two
goods must equal the ratio of the price of the goods, for the consumer to
achieve maximum satisfaction. (3)
1.3 Comment on any two of the following topics related to elasticities:
(4)
(a) Arc elasticity of demand
(b) Cross price elasticity of demand
(c) Infinite elastic demand
(d) Price elasticity of supply
1.4 Discuss the likely shape the indifference curves related to the
following items will have
(makes sure to also include a graph in your explanation): (4)
(a)Printers and ink cartridges
(b)A box of chicken wings bought at different take away stores (you
may choose
which stores! You can also assume that they include the same number of
wings)
(655050) - DUE 2 April 2025; 100% correct solutions and
explanations.
Question 1: (15 marks)
1.1 In microeconomics we need to make certain assumptions about the
preferences of consumers. Use real life examples to explain any two of
these assumptions. (4)
1.2 Critically evaluate why the marginal rate of substitution between two
goods must equal the ratio of the price of the goods, for the consumer to
achieve maximum satisfaction. (3)
1.3 Comment on any two of the following topics related to elasticities:
(4)
(a) Arc elasticity of demand
(b) Cross price elasticity of demand
(c) Infinite elastic demand
(d) Price elasticity of supply
1.4 Discuss the likely shape the indifference curves related to the
following items will have
(makes sure to also include a graph in your explanation): (4)
(a)Printers and ink cartridges
(b)A box of chicken wings bought at different take away stores (you
may choose
which stores! You can also assume that they include the same number of
wings)
