Micro ans Macro Economics

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Assignment2 Macro Economics B. Student 8069 FD Roodt email:

Frans.Roodt@nwu.ac.za Cell: 0825596746

QUESTION 1

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1.1. D

Various possible answers are provided for each question. Choose the correct answer and only write down the
letter next to the question Ex 1 A.
1.1 Which ONE of the following is not a method of calculating national income?
A expenditure method
B output method
C income method
D taxation method

1.2 Technological development is essential for future economic growth because it 1.2 D
A accelerates the economic growth rate
B increases the competitiveness of industries
C leads to further inventions, innovations and scientific discoveries
D all the above-mentioned

1.3 An increase in the following would likely lead to a decrease in national income: A consumption expenditure
B plant and equipment investment
C imports

1.3 C

D residential construction

1.4 Which ONE of the following is not a wage system?

1.4 C

A incentive
B piece
C olace
34
D Time

1.5 Which of the following would be considered a transfer payment?
A payment for a train journey
B monthly instalments on a car
C social security payments

1.5 C

D payment for a room in a hotel

1.6 GDP is the market value of all final goods and services produced in a …
A given period of time

1.6 A

B given period of time after deduction of indirect business taxes
C given period of time after deduction of depreciation
D given period of time excluding exports

1 .7 The most general scale used to measure inflation is the … index.
A consumer’s
B consumer’s price 1.7 B
C production price D selling price

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

1.8 Stagflation occurs where prices 1.8 C
A drop in an economic recession
B rise in an economic revival
C rise in an economic recession
D drop in an economic revival

1.9 Macro-economics … 1.9 D
A studies the functioning of the economy in its entirety
B offers explanations for variations in economic processes over time
35
C measures economic processes over time
D involves all of these

1.10 The national income is a measure of :: 1.10 A
A income earned in producing the GOP
B earned and unearned incomes received in a given period of time
C income earned in producing the GOP less transfer payments
D income earned in producing the GOP minus indirect business taxes

1.11 Consumers will tend to buy more of the product when: A its price is reduced 1.11 D
B their income rise
C the prices of competing products rise
D all the above-mentioned

1.12 The following factors influence the supply of labour: (i) labour force 1.12 C (i) , (ii) and (iii)
(ii) pension age
(iii) risk factor involved in various occupations
(iv) MIP of labour
A (i), (ii) and (iv) B (i) and (ii)
C (i) , (ii) and (iii)
0 (iii and (iv)

1.13 Which of the following is not a method to combat unemployment? 1.13 D
A economic growth
B unemployment insurance
36
C inward industrialization
D legal tender

1.14 An increase in supply means that … 1.14 B
A there has been an increase in demand
B the supply curve has shifted to the right
C there has been a decrease in demand
D none of the above-mentioned

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

1 .15 Which of the following is NOT a production factor? 1.15. A
A profits
B labour
C machinery
D knowledge

1.16 The position of those workers who find themselves temporarily between jobs,is referred to as. …
Unemployment 1.16. A
A frictional
B Structural
C seasonal
D cyclical

1.17 The most important restriction(s) on trade unions is/are….

1.17. D

A prohibition on party political activities
B prohibition on strikes
C that certain occupations are excluded
D all the above-mentioned

1.18 The components of money are :

1.18. (i), (ii), (iii)

(i) notes and coins (ii) saving deposits (iii) call money
(iv) deposits at call at acceptance banks
A (i) ,(ii),(iii)
8 (i) , (ii) C (iii),(iv) D ((i), (iii)

1.19 Which of the following categories of taxes provide the largest percentage of tax revenues?
A individual income tax

1.19. A

B excise taxes
C property taxes
D employment taxes

1.20 Which instrument is used to determine economic growth?

1.20. C

A CPIX
B LFS
C GOP
D PPI (20 X1 =20) (20)

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

QUESTION 2
Use the information in the table below and answer the questions that follow: Q 2. A. R 100 200 100
Wages Workers demanded Workers supplied
A. R 100 200 100
B. R200 150 150
C. R300 100 200
D. R400 50 250

QUESTION3
3.1 Use the following information and do the necessary calculations:
GOP@ market prices
Net factor payments to foreign countries
Indirect taxes
Provision for depreciation
Subsidies
R296 667
R 8 182
R 35 120
R 47 007
R 5 830
3.1 .1 GNP @ market price
GDP + NFP = GNP
296,667 + 8,182 = 304,849

3.1.2 NNP@ market price
GNP – Depreciation = NNP
304,849 – 47,007 = 257,842

3.1.3 NNI
NNP – Indirect Taxes
257,842 – 35,120 = 222,722

(1) (1) (1)

3.2 Answer QUESTON 3.2.1 and QUESTION 3.2.2 with reference to the following information:
Consumer spending 80 000
Investment spending 120 000
Government spending 35 000
Net foreign spending ( X-M) -25 000
Provision for depreciation 8 000
Net factor payments to foreign countries 12 000

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

Indirect taxes 13 000
Subsidies 8 000
3.2.1 The GDE at market price
GDP @ MP = C + G + I + NX
80,000 + 35,000 + 120,000 + (-25,000) = 210,000

3.2.2 GOP at factor cost
GDP @ FC = GDP @ MP – Indirect Taxes + Subsidies
210,000 – 13,000 + 8,000 = 205,000

(1) (1)
(5)

QUESTION 4
Name the FIVE macro economic objectives as well as the instruments used to measure it. (10)

Answer

1. Sustainability: The sustainability of economic growth is an objective of macroeconomics. This is
measured by real GDP growth rate

2. Employment: Maximizing employment levels in an economy is another key objective of macroeconomic
policies. It is measure by unemployment as a fraction of the labour force.

3. Price Stability: Prices of goods and services need to increase in a controlled fashion. This is measured
by CPI or WPI Inflation.

4. Maintaining a healthy BoP: The capital flows and net exports are an important objective of the
macroeconomic policy for a stable currency. This is measured by trade deficit and capital flows.

5. Increasing Productivity: This is measured by labour force participation and increased technological
advancement

QUESTION 5
5.1 Discuss the FOUR types of unemployment. (5X4= 20)

Answer

The four types of employment are:

1. Full time: This involves working on regular weekly basis full time.
2. Part time: This involves working on a regular basis but only for part of the working hours
3. Casual Employment: Casual employees work on an irregular basis as and when needed
4. Apprenticeship: These are generally trainees working on probation while learning on the job

5.2 Complete the following:
The demand for labour is always a ( a) derived demand. The demand for labour is determined by the (b) price of
the final product and the (c) wage rate of labour.
(3) (23)

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746


QUESTION 6
Choose the concepts in COLUMN A to match the description from COLUMN B.Write
only the letter (a-j) next to the question number in the answer book, for example 6.1 (a)
COLUMN A
6.1 postponed payments – credit
6.2 transactional motive – influenced by government transactions
6.3 demand for money – call deposits
6.4 precautionary motive – to cool down economy
6.5 speculative motive – need to hold money
6.6 supply of money – policy to stimulate the economy
6.7 component of money – savings deposit
6.8 SARB – banker of the state
6.9 deflation – influenced by income and price level
6.10 expansionary policy – policy to stimulate the economy

QUESTION 7
7.1 Complete the following:
COLUMN B

A) call deposits
B) influenced by government transactions

C) credit
D) banker of the state
E) to cool down economy
F) need to hold money
G) influenced by income and price level
H) savings deposit
I) related to the store function of money
J) policy to stimulate the economy
{10x 1 = 10)
(10)

7.1.1 Visible exports – Visible Imports … = trade balance

7.1.2 Visible balance+ invisible balance =?Total Balance of Trade.
{2 x1 = 2)
41 •

7.2 The following figures are those of a countries balance of payments:
Net gold exports R 185 000
Goods exports R 315 000
Visible imports R 170 000

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

Services receipts R 30 000
Net transfers R 20 000
Capital transfer account -R 120 000
Balance on financial account R 80 000
Unrecorded transactions R 5 000
Use the given information to determine the following
7.2.1 Balance of trade
80,000 + 185,000 + 315,000 + 30,000 + 5,000 + 20,000 -170,000 -120,000
= 345,000

7. 2.2 Balance on current account
315,000 + 30,000 + 20,000 -170,000
= 195,000

7.2.3 Change in net gold and foreign reserves
185,000

QUESTION 8
8.1 Who is the Minister of Finance?
The Minister of Finance is a Government official elected to form Government budget, control and stimulate the
economy and aid macroeconomic policies.

8.2 Differentiate between the fiscal and monetary policy
Answer

Fiscal policy is a macroeconomic tool used to control economic objectives via trade and fiscal deficits. On the
other hand, monetary policies involve use of interest rates and Government intervention to guide the economy.

(1) (1)
(3 X 1 =3) (5)
(1) (2)
8.3 Differentiate between economic growth and economic development in table form (8)
Answer

Economic growth is a narrow concept as compared to economic development. Growth can be measured by
National Output. Economic development encompasses the total development of a nation, including the quality of
life, income distribution etc. It is a much broader term than economic growth.

8.4 Differentiate between comparative and absolute advantage (4) (15)

Answer

Absolute advantage is the economy’s ability to produce more of a certain kind of good or service. Comparative
advantage is the economy’s ability to produce a good or service in a more efficient manner, at a lower marginal
cost.

Assignment 2 Macro Economics B. Student 8069 FD Roodt email:
Frans.Roodt@nwu.ac.za Cell: 0825596746

ANSWER SHEET: Q 1 – Q 2

QUESTION 1

1.1. D

1.2. D

1.3 C
1.4 C
1.5 C
1.6 A
1.17. D
1.18. (i), (ii), (iii)
1.19. A
1.20. C

FRANK ROODT Student number: 8069 – Comments

Assignment 2

Question 1

In this question you only got one wrong that 1.18, the answer is supposed to be D but you wrote A

Question 2

You did not include the graph hence you did not answer the question. You lost about 12marks

Question 3

All your formulas are wrong hence the figures for your answers are wrong. You lost 5marks. As an example I have provided you with two of the correct formulas

GNP @mp: GDP @ mp – net factor payments to foreign countries

NNP @ mp: GDP @mp –provision for depreciation-net factor payments to foreign countries

Question 4

You omitted the macro economic stability – Equitable distribution of national income. You lost 2 marks

Question 5

You lost 20 marks because you misunderstood the question. The types of unemployment are: frictional, structural, seasonal and cyclical. These are the ones you were supposed to discuss

Question 6

You lost 7 marks because you did not match the correct column A to column B. I have highlighted them in yellow.

Question 7

Your formulas are still incorrect.

Question 8

8.1 Who is the Minister of Finance, NOT the function. You were just supposed to mention his name

8.3 Said in table format and you did not include a table at all

Q1 = 19/20

Q2 = 0/12

Q3 = 0/5

Q4 = 8/10

Q5 = 3/23

Q6 = 3/10

Q7 = 1/5

Q8 = 5/15

Total = 39/100 – 39%

My comment is read more and please make sure you understand the question before answering it.


Assignment 1


Question 1

1.4 is incorrect. The correct is D


Question2

You lost marks because you did not include the figures in the graph you draw


Question 3

3.1 You lost marks because you did not draw graphs, the question says with the aid of GRAPH. You only wrote


Question 4

Everything is correct


Question5

You lost 12 marks on this question because you misunderstood the question. You were only expected to use a simple demand and supply and say what which of the two shifts. Read chapter 8 in the text book


Question 6

You did not answer 6.2 and 6.3


Question 7

You lost marks 20 because you did not include graph in your comparison of monopoly and perfect competition.


Question 8

You did not include the MC column also your AC cost is wrong, AC=TC/q

You also did not include answers to 8.2 and 8.3

Q1 = 9/10

Q2 = 15/25

Q3 = 12/25

Q4 = 5/5

Q5 = 0/12

Q6 = 10/18

Q7 = 20/40

Q8 = 3/15

Total = 74/150 – 49%

FRANKROODT Student number: 8069 – Comments

Assignment 2

Question 1

In this question you only got one wrong that 1.18, the answer is supposed to be D but you wrote A

Question 2

You did not include the graph hence you did not answer the question. You lost about 12marks

Question 3

All your formulas are wrong hence the figures for your answers are wrong. You lost 5marks. As an
example I have provided you with two of the correct formulas

GNP @mp: GDP @ mp – net factor payments to foreign countries

NNP @ mp: GDP @mp –provision for depreciation-net factor payments to foreign countries

Question 4

You omitted the macro economic stability – Equitable distribution of national income. You lost 2
marks

Question 5

You lost 20 marks because you misunderstood the question. The types of unemployment are:
frictional, structural, seasonal and cyclical. These are the ones you were supposed to discuss

Question 6

You lost 7 marks because you did not match the correct column A to column B. I have highlighted
them in yellow.

Question 7

Your formulas are still incorrect.

Question 8

8.1 Who is the Minister of Finance, NOT the function. You were just supposed to mention his name

8.3 Said in table format and you did not include a table at all

Q1 = 19/20

Q2 = 0/12

Q3 = 0/5

Q4 = 8/10

Q5 = 3/23

Q6 = 3/10

Q7 = 1/5

Q8 = 5/15

Total = 39/100 – 39%

My comment is read more and please make sure you understand the question before answering
it.

Assignment 1

Question 1

1.4 is incorrect. The correct is D

Question2

You lost marks because you did not include the figures in the graph you draw

Question 3

3.1 You lost marks because you did not draw graphs, the question says with the aid of GRAPH. You
only wrote

Question 4

Everything is correct

Question5

You lost 12 marks on this question because you misunderstood the question. You were only
expected to use a simple demand and supply and say what which of the two shifts. Read chapter 8
in the text book

Question 6

You did not answer 6.2 and 6.3

Question 7

You lost marks 20 because you did not include graph in your comparison of monopoly and perfect
competition.

Question 8

You did not include the MC column also your AC cost is wrong, AC=TC/q

You also did not include answers to 8.2 and 8.3

Q1 = 9/10

Q2 = 15/25

Q3 = 12/25

Q4 = 5/5

Q5 = 0/12

Q6 = 10/18

Q7 = 20/40

Q8 = 3/15

Total = 74/150 – 49%

1

QUESTION 1
Answer the following questions Only write down the numbers ex 1.1 A.
Study TABLE 1 and answer the questions that follow:
TABLE 1
PRICE (in Rand) QUANTITY DEMANDED QUANTITY SUPPLIED
2 160 80
4 140 100
6 120 120
8 100 140
10 80 160
12 60 180

1.1 In TABLE 1, the equilibrium price is …
A R1

2

B R

4

C R

6

D R

8

1.2 A Market shortage will exist if …
A the price is above the equilibrium position
B the price is below the equilibrium position
C there is too many suppliers
D ALL of the above-mentioned

1.3 The additional utility derived from consuming an additional unit of a product is referred to
as .. . utility…
A diminishing
B marginal
C total
D average

1.4 A point inside the production possibility curve represents …
A an inefficient use of resources
B unemployment
C underemployment
D ALL the above-mentioned
1.5 If an increase in the price of product A causes the demand curve for product B
to shift to the right, then …
A A and B are compliments
B the price of A must be higher than the price of B
C B must be a normal product
D A and B are substitutes
1.6 If the consumer ‘s demand for fish increased because of an increase in the price of lamb,
these products are examples of …
A inferior
B normal
C substitute
D complimentary

user
D:20120903231345+02’00’2012/09/03 11:13:4

5

PM
——————————————–
1.4 D. correct answer
Q1 = 9/10

user
D:20120903233317+02’00’2012/09/03 11:33:1

7

PM
——————————————–
grand total 74/150

= 49 %

2

1.7 If the price of a product increases it causes a …

A shift of the demand curve to the right
B movement along the demand curve
C decrease in the elasticity of demand
D shift of the demand curve to the left

1.8 The concept opportunity costs …
A can be applied to the analysis of any decision-making process
B is relevant only to Economics
C refers only to actual payments and income
D applies to consumers but not firms

1.9 The fact that a decline in the price of a product causes producers to reduce the quantity
of the product
A the law of supply
B the law of demand
C a change in supply
D a change in demand

1.10 When economists speak of normal goods they mean …
A manufactured goods with no defects
B goods people usually buy
C goods of which the marginal utility decrease as consumption increases
D goods of which the quantity demanded increases with rising incomes
(10X1=10)
(10)

QUESTION 2
Use the information in the table below and answer the questions that follow:
TABLE 2
Price per square metre in
Rand
: Quantity demand of solar
panels per year in
.. thousands Quantity supplied of solar panels per year in thousands
100 5 40
80 15 25
70 20 20
60 25 15
40 40 10

2.1 Illustrate the demand and supply schedule graphically on one graph. (11)
2.2 user

D:20120903231500+02’00’2012/09/03 11:15:00
PM
——————————————–
you should have included the number
in table on the respective axis on your
graph

3

Determine the equilibrium price and quantity from the graph.
(2) R70

2.3 Calculate the elasticity of supply if the price of solar panels increases from R80
to R100 per square meter.

Elasticity of Supply = % ∆ in quantity supplied / % ∆ in price

= 60%/25% = 2.4

The quantity demanded increases with 10 units at each price level.
2.5
What is the NEW equilibrium price?
(1) If the price increases from 70 to 80, the quantity demanded drops to 15

2.6
What is the NEW equilibrium quantity?
(1)
(25)

QUESTION 3
3.1 Explain the 5 types of price elasticity of demand with the help of graphs.
(5×3=15)

The five types of elasticity of demand:

1. Perfectly elastic demand: any increase in price causes the demand of the product
to drop to zero.
2. Perfectly inelastic demand: a change in the price level of the product does not
affect the demand at all.

user
D:20120903231733+02’00’2012/09/03 11:17:33
PM
——————————————–
equilibrium qtty is 20 you havent
included it

Q2 = 15/25

4

3. Relatively inelastic demand: the change in quantity demanded is less than the
change in the price.
4. Relatively elastic demand: the change in quantity demanded is more than the
change in price.
5. Unitary elastic demand: the change in the price of the good is equal to the change
in the quantity demanded.

3.2.1 Study the graph below and answer the questions that follow.
Apples
L Bananas
3.2.1 What are curves 1,, l2 and l3 called? (2)
3.2.2 The curves are known as indifference curves
What do these curves represent?
(2) The curves determine the utility of a basket of goods. At any point on the curve,
the consumer is indifferent: he has the same utility along the entire curve.
3.2.3
What is line LK called?
(2)
3.2.4
Which point represents consumer equilibrium explains? Explain.
(4) The point where demand curve and supply curve interact is the consumer
equilibrium.
(25)

QUESTION 4
Indicate whether the following are characteristics of a free-market system or a command
system. Write only the correct answer next to the question number, for example 4.6 Free-
market.
4.1 The central government owns and controls almost all means of production. Command
Market
4.2 The price mechanism plays an important role in the solution to economic problems. Free
Market
4.3 The consumer does not buy goods that he/she dislikes. Free Market
4.4 Expected profits and possible losses are the only reason for the expansion of decreasing
of economic activities. Free Market

4.5 The price of goods is fixed by the state. (5 X 1 = 5) (5) Command Market

QUESTION 5
5. Use each scenario below to indicate graphically how the equilibrium price and – quantity of
motor vehicles will change. Also provide a brief motivation for each graph
5.1.1 The interest rate in the South African economy has decreased by 4,5% during the past
six months

user
D:20120903231950+02’00’2012/09/03 11:19:50
PM
——————————————–
the question says with the help of
graphs, where are your graphs? Q3=
12/25

user
D:20120903232014+02’00’2012/09/03 11:20:14
PM
——————————————–
Q4 = 5/5

5

1

0%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Jan Feb Mar Apr May Jun

South African Output decreasing from 9% to 4.5% over the six month period.

5.1.2 The motor manufacturers increase their investment in capital goods

35%

30%

25%

20%

15%

10%

5%

0%
2010 2011

Increase in investment in capital goods from 20% to 30% y-o-y.

5.1.3 Kumba has increased the price of steel by 15% and as a result they are charging
similar prices for steel than their international competitors

6

G
D

P
%

S

te
e
l
P

ri
c
e

i
n

U
S

D

Steel Price in USD

1200

1150

1100

1050

1000

950

900
1 2

Kumba increased the steel prices from 1,000 USD per tonne to 1,150 USD per tonne

5.1.4 The USA,Europe and Japan are expected to record increases in their economic growth
rates during 2010 (4×3=12)
(12)

6%

5%

4%

3%

2%

1%

0%
200

9

US and Japan GDP Grow th Rates

US and Japan GDP growth rate increases from 4% to 5% in 2010.

QUESTION 6
6.1.1 Choose the statements from COLUMN B to match the term in COLUMN A.
Write only the letter ( A- J) next to the question number (6.1.1. – 6.1.10.) for example 6.1.1.A.
COLUMN A
6. 1 .1 Monopoly
6.1. 2 Short-term equilibrium
6.1 .3 Physical needs

user
D:20120903232345+02’00’2012/09/03 11:23:45
PM
——————————————–
you did not understand the question.
you merely had to used a simply
downward sloping linear demand curve
and upward sloping supply curve to
show the scenarios!!!!!1
Q5 =0/12

7

6.1.4 Perfect compet itive market
6.1.5 Marginal utility
6.1 . 6 Income elasticity
6.1 .7 Public sector
6.1.8 Macro-economics
6.1.9 Micro-economics
6 1 .10 E conomic growth
COLUMIB
A additional satisfaction from an additional unit of a product consumed
B sensitivity of demand in relation to income
C MC= lv11
D any process that results in a quantitat ive long-term change in an economic structure
E a market where the seller is a price taker
F that section of the economy that is controlled an d managed by the state on a local or
national level
G a study of broad aggregates that influences the whole economy
H deals With aspects such as behav1our of consumers, changes in tastes and habits of
consumers and price determination
need for food clothing , housing
J the supply of a commodity or service is controlled by a single person or group of people to
such an extent that there can be little or no competition from anyone else.
(10X1=10)
6.2 Name 4 characteristics of a perfect competitor.
6.3 Name 4 characteristics of a monopolist.
(4 X 1 = 4) (4 X 1 = 4) (18)
1-J
2-C
3-I
4-E
5-A
6-B
7-F
8-G
9-H
10-D

QUESTION 7
7.1 Study the following graph and answer the questions that follow:
FIGURE2
Capital
goods
40
100 350
Consumer goods (‘000)
7.1.1 If 40 thousand units of capital goods are currently produced, calculate the opportunity
cost to produce 80 thousand units of capital goods. (Show ALL calculations.) (4)

user
D:20120903232454+02’00’2012/09/03 11:24:54
PM
——————————————–
Q6 = 10/18
where is 6.2 and 6.3

8

Ans.
At 40000 units of Capital Goods= 350000 Units of Consumer Goods were produced
At 80000 units of Capital Goods= 100000 Units of Consumer Goods were produced
This means that to produce additional 40000 units of capital goods company has to
forgo 250000 units of Consumer Good which is the opportunity cost for producing
80000 units of Capital Goods.

7.1.2 What does point X represent? (2)
7.1.3 Which point on the graph can only be attained through economic growth? (2)
7.1.4 What does the production possibility curve represent? (2)
Ans. Production Possibilty curve represent various possibilities of production that
can be achieved by the given resources.
7.2
7.2.1 Calculate the values of (a) , (b) and (c). (6)
a. 50
b. 120
c. 20
7.2. 2 Which law is represented or illustrated by COLUMN 3?
Ans. Diminishing Marginal Utility
7.3 Compare the perfect competitor and monopolist with one another. Use graphs.(20)
Ans. Graphs to be prepared
7.4 ….. Is the basic economic problem. (2)
Ans. Scarcity of resources
(40)

QUESTION 8
Use the information in the table below to answer the questions that follow:
QUANTITY TOTAL COST FIXED COST VARIABLE COST AVERAGE COST
PROFIT
0 100 100 0 – -100
1 130 100 30 130 -90
2 155 100 55 77.5 -75
3 175 100 75 58.33 -55
4 196 100 96 49 -36
5 220 100 120 44 -20
6 250 100 150 41.67 -10
7 284 100 184 40.57 -4
8 324 100 224 40.5 4
9 370 100 270 41.11 10
8.1.1 Calculate the variable cost,average variable cost and average cost in tableform (10)
Done in table above.
8.1.2 Determine where profit will be maximised in the short-run according to the marginal
approach if the product sells at R40,00 per unit (2)
8.1.3 Illustrate the marginal approach and indicate on the graph the areas that represent an
economic loss,normal profit and an economic profit (3}(15)

user
D:20120903232659+02’00’2012/09/03 11:26:59
PM
——————————————–
I am meant to believe you omitted the
graphs. Q7= 20/40

user
D:20120903233003+02’00’2012/09/03 11:30:03
PM
——————————————–
where is the MC, the average cost is
wrong because it cant be a negative
value. AC= TC/Q

I do not see the answers to 8.2 & 8.3

9

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