ECS1501 : ASSIGNMENT 1 – 6 Solutions(Practice material).

ECS 1501
MCQ : ASSIGNMENT 1 – 6 Solutions.
(PLEASE NOTE THESE ARE
ANSWERS FROM PREVOUIS
ASSIGNMENTS – REVISION
PURPOSE )

, TABLE OF CONTENT
Assignments 2018 Page 3
Assignments 2019 Page 12
Assignments 2020 Page 26
Test Bank 1 Page 43
Test Bank 2 Page 55

, ASSIGNMENTS 2018

➢ First Assignment

1. Demand is the quantity of goods :
A) Desired by consumers.
B) Ordered by consumers in a particular period.
C) Consumers are willing and able to buy at particular prices in a certain period.
D) That consumers require in order to survive.

2. Which of the following will not cause a change in the demand for coffee (illustrated by a shift of the demand
curve) ?
A) An increase in the price of coffee.
B) A decrease in the price of milk, a complement.
C) An increase in the number of people drinking coffee.
D) An increase in the income of households.

3. How can the impact of an increase in the price of petrol on the demand curve for petrol be illustrated ?
A) The demand curve for petrol will shift to the left.
B) The demand curve for petrol will shift to the right.
C) The demand curve for petrol will remain unchanged.
D) The demand curve will become more elastic.

4. If there is a technological breakthrough in the beer manufacturing process then,
A) The supply of beer will increase.
B) The supply of beer will decrease.
C) The demand for beer will increase.
D) There will be no effect on the supply or demand of beer.

5. Which one of the following statements is incorrect ?
A) An increase in supply is illustrated by a rightward shift of the supply curve.
B) An increase in the quantity supplied is illustrated by an upward movement along the supply curve.
C) There is a positive relationship between the price of a product and the quantity supplied.
D) A decrease in supply is illustrated by a downward movement along the supply curve.

6. If there is an increase in the price of red meat, a substitute in production for milk, then :
A) The supply of milk will increase.
B) The supply of milk will decrease.
C) The demand for milk will decrease.
D) There will be a movement along the supply curve for milk.

7. The diagram below shows the market for hamburgers.

, If the price of hamburgers is fixed at R35 per burger, then :
A) There will be a surplus of 80 hamburgers.
B) There will be a shortage of 50 hamburgers.
C) The quantity of hamburgers supplied will fall to zero.
D) There will be a shortage of 80 hamburgers.

8. Consumer surplus indicates that :
A) It is impossible to increase consumer well-being by changing the way in which income is spent.
B) Consumers often get more value from a good than is represented by the price.
C) The allocation of resources is decided by the interaction of buyers and sellers.
D) Market equilibrium can always be attained.

9. The producer surplus is :
A) Always greater than the consumer surplus.
B) The difference between producers’ revenue and their cost of production.
C) The difference between the price that producers receive and the lowest prices at which they are willing to
supply the different quantities.
D) What producers have left after all their expenses have been paid.

10. If the equation for a market demand curve is Qd = 100 – 0,5P and the equation for a market supply curve is
Qs = –20 + P, the market equilibrium price and quantity are :
A) P = 0,5; Q = -20
B) P = 0,5; Q = 80
C) P = 80; Q = 60
D) P = 60; Q = 100

11. Use the diagram below to answer the question.




The diagram depicts a decrease in the demand for pies on a campus. If at the same time there was a rent increase
for food outlets on campus, then in comparison with the original equilibrium E0, there would be :
A) An increase in equilibrium price and quantity.
B) An increase in equilibrium quantity but a decrease in price.
C) A decrease in equilibrium quantity but an increase in price.
D) A decrease in equilibrium quantity but an indeterminate effect on price.