ECS1501-25-Y_Topics_12-15 Assessments Assessment6
auiz
Started on Sunday, 28 September 2025, 5:40 PM
State Finished
Completed on Sunday, 28 September 2025, 6:23 PM
Time taken 42 mins 17 secs
Marks 38.00/40.00
Grade 95.00 out of 100.00
Feedback
Excellent work! You seem to understand the content of Topics 14 and 15. Please read the feedback for each question
carefully and ensure you agree with the explanations provided.
Note that
+ you are allowed to submit two attempts for this assessment. If you take two attempts, the average mark of the two will
contribute towards your final credits.
« you must wait 24 hours before you can attempt the assessment again.
Question 1 Iconfirm
Complete that this assessment will be my own individual work;
Not oraded that| will not cheat in any way in completing and submitting this assessment
1 confirm.
1do not confirm.
Question 2 The only seller of shoes in a rural town is an example of a monopoly.
Comect
Mark 1,00 out of
100
True
False
The statement is true.
Inthe context of a rural town where there s only one seller of shoes, it can be considered an example of a monopoly. A monopoly
occurs when there is a single seller or producer of a good or service in a market with no close substitutes and significant barriers to
entry for potential competitors. In this case, since there is no other seller of shoes in the rural town, the sole seller has a monopoly
overthe local shoe market.
As amonopolist, the seller in the rural town has control over the price and quantity of shoes sold. They can set prices higher than in
a competitive market, as consumers do not have alternative options. The lack of competition can resultin higher prices and reduced
consumer choice.
,Question3 Perfect competition is characterised by a large degree of goverment intervention.
Incortect
Mark 0,00 outof
100
True
False
The statement is false.
Perfect competition is characterized by a lack of govemment intervention. In a perfectly competitive market, there is no need for
government intervention because the market forces of supply and demand determine the prices and quantities of goods and
services.
Question 4 Look at the figure below and then indicate whether the statement s True (T) or False (F):
Comect R
Mark 1.00 out of
100
Revenue and cost (rand)
The firm's supply curve starts at price R20 and Q.
True
False
‘The rising portion of the firm's marginal cost curve above the minimum of its average variable cost curve at point d is the firm's
supply curve.
P=10
The firm will not produce at all as it does not even covers the fixed costs.
P=20
The firm will be at its close-down point (d) and it is immaterial f it shuts down or continues production
P=30
The firm will minimise its economic losses by producing at point c.
P=40
The firm will make a normal profit (ie it will break even) at point b
P=50
The firm will maximise economic profit at point e.
,Question 5 Inthe long run, allfactors of production are variable.
Correct
Mark 1,00 out of
100
True
False
The statement is true.
Inthe long run, all factors of production are considered to be variable.
In economics, the short run refers to a period of time in which at least one factor of production is fixed, typically capital or plant
capacity. In contrast, the long run is a period of time in which all factors of production can be adjusted.
Inthe long run, firms have the flexibility to change their inputs, such as labour, capital, and technology, in order to optimise their
production process. They can expand or contract their operations, adjust the size of their facilities, hire or fire workers, and adopt
new technologies or production methods.
Question 6 When a firm decides not to produce any output (ie when it decides to shut down) its loss equals total fixed cost.
Correct
Mark 1.00 out of
100
True
False
The statement is true.
In the short run, a firm may decide to shut down if the price of the product falls below the minimum average variable cost. In this
case, the firm is unable to cover its variable costs and would incur a loss by continuing production. By shutting down, the firm
avoids incurring variable costs and limits its loss to fixed costs.
‘The fixed costs are the costs that do not vary with the level of output, such as rent, insurance, or salaries. Since these costs are
incurred regardless of whether the firm produces any output or not, the loss incurred when shutting down is equal to the total fixed
cost
, Question 7 If a firm has a total revenue of R80 000 per annum and economic cost of R80 000, it earns a normal profit.
Correct
Mark 1,00 out of
100
True
False
‘The statement is true.
Anormal profit refers to a situation where a firmis total revenue is equal 1o its economic cost. In this case, if the firm has a total
revenue of R8O 000 per annum and an economic cost of R0 000, it means that the firm is covering all its costs and there is no
economic profit or loss.
Economic Profit = Total Revenue - Economic Cost
Economic Profit = R80 000 - R80 000 Economic Profit = RO
Since the economic profit s zero, the firm is eaming a normal profit, which means it s just covering its costs and not making any
additional profit
Question 8 Monopoly and monopolistic competition are two different market structures.
Comect
Mark 1.00 out of
100
True
False
Unsure
The statement s true.
Monopoly and monopolistic competition are two distinct market structures
Monopoly refers to a market structure where there is only one seller or producer of a product or service with no close substitutes. In
amonopoly, the single firm has significant control over the market, allowing it to set prices and quantity levels with limited
competition.
On the other hand, monopolistic competition is a market structure characterized by many sellers or firms competing with
differentiated products. Each firm in a monopolistically competitive market offers a slightly different product or service to attract
customers. This differentiation creates some level of market power, allowing firms to have some control over price and quantity.
However, there are still many competing firms in the market, which limits their individual market power.
auiz
Started on Sunday, 28 September 2025, 5:40 PM
State Finished
Completed on Sunday, 28 September 2025, 6:23 PM
Time taken 42 mins 17 secs
Marks 38.00/40.00
Grade 95.00 out of 100.00
Feedback
Excellent work! You seem to understand the content of Topics 14 and 15. Please read the feedback for each question
carefully and ensure you agree with the explanations provided.
Note that
+ you are allowed to submit two attempts for this assessment. If you take two attempts, the average mark of the two will
contribute towards your final credits.
« you must wait 24 hours before you can attempt the assessment again.
Question 1 Iconfirm
Complete that this assessment will be my own individual work;
Not oraded that| will not cheat in any way in completing and submitting this assessment
1 confirm.
1do not confirm.
Question 2 The only seller of shoes in a rural town is an example of a monopoly.
Comect
Mark 1,00 out of
100
True
False
The statement is true.
Inthe context of a rural town where there s only one seller of shoes, it can be considered an example of a monopoly. A monopoly
occurs when there is a single seller or producer of a good or service in a market with no close substitutes and significant barriers to
entry for potential competitors. In this case, since there is no other seller of shoes in the rural town, the sole seller has a monopoly
overthe local shoe market.
As amonopolist, the seller in the rural town has control over the price and quantity of shoes sold. They can set prices higher than in
a competitive market, as consumers do not have alternative options. The lack of competition can resultin higher prices and reduced
consumer choice.
,Question3 Perfect competition is characterised by a large degree of goverment intervention.
Incortect
Mark 0,00 outof
100
True
False
The statement is false.
Perfect competition is characterized by a lack of govemment intervention. In a perfectly competitive market, there is no need for
government intervention because the market forces of supply and demand determine the prices and quantities of goods and
services.
Question 4 Look at the figure below and then indicate whether the statement s True (T) or False (F):
Comect R
Mark 1.00 out of
100
Revenue and cost (rand)
The firm's supply curve starts at price R20 and Q.
True
False
‘The rising portion of the firm's marginal cost curve above the minimum of its average variable cost curve at point d is the firm's
supply curve.
P=10
The firm will not produce at all as it does not even covers the fixed costs.
P=20
The firm will be at its close-down point (d) and it is immaterial f it shuts down or continues production
P=30
The firm will minimise its economic losses by producing at point c.
P=40
The firm will make a normal profit (ie it will break even) at point b
P=50
The firm will maximise economic profit at point e.
,Question 5 Inthe long run, allfactors of production are variable.
Correct
Mark 1,00 out of
100
True
False
The statement is true.
Inthe long run, all factors of production are considered to be variable.
In economics, the short run refers to a period of time in which at least one factor of production is fixed, typically capital or plant
capacity. In contrast, the long run is a period of time in which all factors of production can be adjusted.
Inthe long run, firms have the flexibility to change their inputs, such as labour, capital, and technology, in order to optimise their
production process. They can expand or contract their operations, adjust the size of their facilities, hire or fire workers, and adopt
new technologies or production methods.
Question 6 When a firm decides not to produce any output (ie when it decides to shut down) its loss equals total fixed cost.
Correct
Mark 1.00 out of
100
True
False
The statement is true.
In the short run, a firm may decide to shut down if the price of the product falls below the minimum average variable cost. In this
case, the firm is unable to cover its variable costs and would incur a loss by continuing production. By shutting down, the firm
avoids incurring variable costs and limits its loss to fixed costs.
‘The fixed costs are the costs that do not vary with the level of output, such as rent, insurance, or salaries. Since these costs are
incurred regardless of whether the firm produces any output or not, the loss incurred when shutting down is equal to the total fixed
cost
, Question 7 If a firm has a total revenue of R80 000 per annum and economic cost of R80 000, it earns a normal profit.
Correct
Mark 1,00 out of
100
True
False
‘The statement is true.
Anormal profit refers to a situation where a firmis total revenue is equal 1o its economic cost. In this case, if the firm has a total
revenue of R8O 000 per annum and an economic cost of R0 000, it means that the firm is covering all its costs and there is no
economic profit or loss.
Economic Profit = Total Revenue - Economic Cost
Economic Profit = R80 000 - R80 000 Economic Profit = RO
Since the economic profit s zero, the firm is eaming a normal profit, which means it s just covering its costs and not making any
additional profit
Question 8 Monopoly and monopolistic competition are two different market structures.
Comect
Mark 1.00 out of
100
True
False
Unsure
The statement s true.
Monopoly and monopolistic competition are two distinct market structures
Monopoly refers to a market structure where there is only one seller or producer of a product or service with no close substitutes. In
amonopoly, the single firm has significant control over the market, allowing it to set prices and quantity levels with limited
competition.
On the other hand, monopolistic competition is a market structure characterized by many sellers or firms competing with
differentiated products. Each firm in a monopolistically competitive market offers a slightly different product or service to attract
customers. This differentiation creates some level of market power, allowing firms to have some control over price and quantity.
However, there are still many competing firms in the market, which limits their individual market power.
