2025 - ECS2601 - ASSESSMENT 3 - QUESTIONS AND ANSWERS - SEMESTER 1

2025 – ECS2601 – ASSESSMENT 3 – EXPECTED Q&A



Assessment 3
Started on Monday, 16 September 2024,
State Finished
Completed on Monday, 16 September 2024,
Time taken
Marks 30.00/30.00
Grade 100.00 out of 100.00


Question 1
Consider the following demand and supply functions:

Demand: Qd = 400 – 40P.

Supply: Qs = –100 + 60P.

What is the equilibrium price and output?

a.
P = R10 and Q = 300

b.
P = R3 and Q = 80

c.
P = R15 and Q = 800

d.
P = R5 and Q = 200

Feedback
First set the demand function equal to the supply function (Qd = Qs). Then isolate
the price ("P" term) on one side of the equation and solve the equation to get the
equilibrium price.

400 - 40P = -100 + 60P

500 = 100P

Pe = 5



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, 2025 – ECS2601 – ASSESSMENT 3 – EXPECTED Q&A


Now, substitute the price ("P" term) found in step 2 into either the supply or demand
function. Solve for equilibrium quantity.

Qe = 400 - 40(5)

Qe = 200


The correct answer is:
P = R5 and Q = 200



Question 2
How does an increase in the price of cooking oil affects the budget line on a graph
when cooking oil is on the y-axis?

a.
An increase will cause the shift of the budet line and get more steeper.

b.
An increase will cause the entire budget line to shift and get flatter.

c.
An increase will cause the budget line to rotate and get flatter.
d.
An increase will cause the rotation of the budget line and get more steeper.

Feedback
The correct answer is: An increase will cause the budget line to rotate and get flatter.



Question 3
A firm’s average fixed cost is R40 if it produces five units of output. If it produces four

units, its average fixed cost will be …

a.
R40

b.
R50


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