ECS2601
EXAM PACK
+27 81 278 3372
,OCTOBER NOVEMBER 2021
Table 1.
Elasticity type Elasticity value
PED coke 0.7
PED sprite 2.1
CPED of coke with respect to sprite 0.5
YED coke - 0.3
YED sprite 1.4
Part 1 of 9 -
Question 1 of 44
Table 1 below shows the demand elasticities for coke and sprite. Use the information in the
table to answer the question. Remember: CPED is the cross-price elasticity of demand; YED
is the income elasticity of demand, and PED is the price elasticity of demand. From the
table, we can conclude that
TABLE 1_Elasticity.docx 12 KB
• A. Coke is an inferior good.
• B. The price elasticity of demand for coke is elastic
• C. Coke and Sprite are complements.
• D. The price elasticity of demand for sprite is inelastic.
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Question 2 of 44
Due to the sugar tax, South Africans consumed 10 thousand bars of chocolate at a price of
R7 per bar in 2021 compared to 15 thousands bars of chocolate sold at R4 in 2015. Calculate
the price elasticity using the midpoint formula.
• A. -0.73
• B. 0.26
• C. -3.7
• D. -0.26
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Question 3 of 44
,Consider the two goods, orange juice and apple juice with 1.8 cross price elasticity. If the
price for orange juice increase …
• A. The consumer will demand less orange juice and more of apple juice because
the two goods are substitute goods, causing the demand for apple juice to shift to the
left.
• B. The consumer will demand less orange juice and more of apple juice because
the two goods are substitute goods, causing the demand for apple juice to shift to the
right.
• C. The consumer will demand less orange juice, and demand more of apple juice
because the two goods are complement goods, causing the demand for apple juice to
shift to the right.
• D. The consumer demand will remain unchanged because the goods are not
related.
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Question 4 of 44
An emerging mobile phone manufacturer is faced with a demand given by P = 200
−0.2QD and a supply given by P = 40 + 0.8QS.
After the imposition of a tax on luxury goods such as electronic devices, the supply
curve of the manufacturer is given by P = 80+ 0.8QS. Using the midpoint formula
calculate the price elasticity of demand after a change in equilibrium price and
quantity
• A.
6.14
• B.
0.68
• C.
0.95
• D.
1. 23
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, Part 2 of 9 -
Question 5 of 44
Refer to graph 1 to answer the following question. What is the total surplus when the price is
R40?
GRAPH 1_Competitive Markets.docx 37 KB
• A. 35 000
• B. 20 000
• C. 25 000
• D. 10 000
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Question 6 of 44
Refer to graph 1 to answer the following question. Suppose the price is set below the market
clearing at R38 as a result of price controls, the deadweight loss is indicated by area ...
GRAPH 1_Competitive Markets.docx 37 KB
• A. C and D
EXAM PACK
+27 81 278 3372
,OCTOBER NOVEMBER 2021
Table 1.
Elasticity type Elasticity value
PED coke 0.7
PED sprite 2.1
CPED of coke with respect to sprite 0.5
YED coke - 0.3
YED sprite 1.4
Part 1 of 9 -
Question 1 of 44
Table 1 below shows the demand elasticities for coke and sprite. Use the information in the
table to answer the question. Remember: CPED is the cross-price elasticity of demand; YED
is the income elasticity of demand, and PED is the price elasticity of demand. From the
table, we can conclude that
TABLE 1_Elasticity.docx 12 KB
• A. Coke is an inferior good.
• B. The price elasticity of demand for coke is elastic
• C. Coke and Sprite are complements.
• D. The price elasticity of demand for sprite is inelastic.
Reset Selection
Question 2 of 44
Due to the sugar tax, South Africans consumed 10 thousand bars of chocolate at a price of
R7 per bar in 2021 compared to 15 thousands bars of chocolate sold at R4 in 2015. Calculate
the price elasticity using the midpoint formula.
• A. -0.73
• B. 0.26
• C. -3.7
• D. -0.26
Reset Selection
Question 3 of 44
,Consider the two goods, orange juice and apple juice with 1.8 cross price elasticity. If the
price for orange juice increase …
• A. The consumer will demand less orange juice and more of apple juice because
the two goods are substitute goods, causing the demand for apple juice to shift to the
left.
• B. The consumer will demand less orange juice and more of apple juice because
the two goods are substitute goods, causing the demand for apple juice to shift to the
right.
• C. The consumer will demand less orange juice, and demand more of apple juice
because the two goods are complement goods, causing the demand for apple juice to
shift to the right.
• D. The consumer demand will remain unchanged because the goods are not
related.
Reset Selection
Question 4 of 44
An emerging mobile phone manufacturer is faced with a demand given by P = 200
−0.2QD and a supply given by P = 40 + 0.8QS.
After the imposition of a tax on luxury goods such as electronic devices, the supply
curve of the manufacturer is given by P = 80+ 0.8QS. Using the midpoint formula
calculate the price elasticity of demand after a change in equilibrium price and
quantity
• A.
6.14
• B.
0.68
• C.
0.95
• D.
1. 23
Reset Selection
, Part 2 of 9 -
Question 5 of 44
Refer to graph 1 to answer the following question. What is the total surplus when the price is
R40?
GRAPH 1_Competitive Markets.docx 37 KB
• A. 35 000
• B. 20 000
• C. 25 000
• D. 10 000
Reset Selection
Question 6 of 44
Refer to graph 1 to answer the following question. Suppose the price is set below the market
clearing at R38 as a result of price controls, the deadweight loss is indicated by area ...
GRAPH 1_Competitive Markets.docx 37 KB
• A. C and D
