ECS 2601 ASSIGNMENT 1

SEMESTER 1 COMPULSORY ASSIGNMENT 01 LEARNING UNITS 1 TO 7 This assignment contributes 50% towards your semester mark. Questions 1 to 20 of the assignment are MULTIPLE-CHOICE questions. In each question, select the most correct option. Answer all questions on a mark-reading sheet 1. What affects the price elasticity of demand for a good? [1] duration for demand decision. [2] substitutability of resources. [3] time elapsed since the income change. [4] the closeness of substitutes. 2. The price elasticity of demand is inelastic if… [1] income elasticity of demand is negative. [2] price elasticity of demand is positive but less than 1. [3] price elasticity of demand is negative. [4] price elasticity of demand is positive but greater than 1. 3. John owns a bread bakery. When he increases the price of a loaf of bread from R10 to R12, the percentage in the quantity demanded is 5%. Calculate the price elasticity of demand for bread. [1] 0.275 [2] 0.050 [3] 0.300 [4] 0.250 4. Yonela consumes cheese cake and tea. When the price of cheese cake increases from R155 to R160, the quantity demand of teabags decreases from 10 to 6. Then we can say that… [1] cheesecake and tea are substitutes. [2] cheesecake and tea are unrelated. [3] cheesecake and tea are compliments. [4] cheesecake and tea are normal goods. 5. Given that Rumbi’s budget line is and the price of tea is R10. What is This study source was downloaded by from CourseH on :55:58 GMT -05:00 This study resource was shared via CourseH Rumbi’s income and the price of cake? [1] Income = R250 and Price of cake = R40. [2] Income = R100 and Price of cake = R10. [3] Income = R250 and Price of cake = R5. [4] Income = R100