ASSIGNMENT 1
Economics 1
ECON_1
DUE DATE: 3 – 17 September 2021
TOTAL MARKS: 100
INSTRUCTIONS:
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Read each question carefully and determine exactly what is required before
attempting to answer.
Set out the answers in a systematic way under appropriate headings and subheadings.
Number your answers clearly.
Ensure that you answer your questions in enough detail to achieve the marks
allocated.
Use your own words, so the markers can establish whether you have
understood the concepts. The markers can then provide you with constructive
feedback.
Students are reminded that this is an individual effort and group submissions will
be penalised.
Please refer to the Start Here tab on OLG4Me or the Student Yearbook for the
formatting and page layout requirements when typing your assignments.
Be mindful of further instructions pertaining to the assessment as provided within
the questions.
Using the Harvard Referencing style, reference in text and provide a reference
list at the end of the assignment.
You will be penalised for plagiarising or copying from any source.
See the rubric at the end of the assignment for penalisation terms.
This assignment is intended for second semester 2021 submission only.
This assessment remains the property of the
Open Learning Group® and may not be reproduced nor distributed in any way.
Economics
2021 Assignment 1
QUESTION 1
[10]
Learning outcome:
Demand and Supply
Product A and Product B are related to each other. They can either be substitute
products or complementary products. With the help of graphs indicate the impact on
the market for Product A if:
1.1 Product A and Product B are substitutes
(5)
1.2 Product A and Product B are complementary.
(5)
QUESTION 2
[10]
]
Learning
outcome:
Perfect competition
Company LALA operates in a perfectly competitive market.
With the use of graphs, illustrate the long-term equilibrium of the company and
industry.
(10)
QUESTION 3
[15]
Learning outcome:
Measuring economic performance
Since the onset of the Covid-19, pandemic workers have been off work often due to
illness and family responsibility. Productivity levels have dropped drastically in South
Africa over the last 18 months.
3.1
Define inflation.
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Economics 1 – ECON_1
(1)
Economics
2021 Assignment 1
3.2
Graphically illustrate the different types of inflation.
(6)
3.3
Referring back to the current situation explained above:
(i)
State what type of inflation South Africa is experiencing.
(1)
(ii)
What other possible causes contributes to this type of inflation?
(4)
3.4
Briefly discuss at least three negative effects of inflation on South Africa.
(3)
QUESTION 4
[16]
Learning outcome:
Elasticity
4.1
(i)
(ii)
(iii)
(iv)
In each of the following cases, do you think the price elasticity of supply is:
perfectly elastic;
perfectly inelastic;
elastic, but not perfectly elastic; or
inelastic, but not perfectly inelastic?
Explain your answer and include an illustration:
a.
An increase in demand this summer for luxury cruises leads to a huge jump in
the sales price of a cabin on the MSC Musica departing from Durban.
b.
The price of a kilowatt of electricity is the same during periods of high electricity
demand as during periods of low electricity demand.
c.
(4)
(4)
Fewer people want to fly during July than during any other month. The airlines
cancel about 10% of their flights as ticket prices fall about 20% during this
month.
d.
(4)
Owners of vacation homes in Umhlanga rent out their homes during the
summer. Due to the Covid-19 pandemic and the weak economy, a 30%
decline in the price of a vacation rental leads to more than half of homeowners
to occupy their vacation homes themselves during the summer.
Economics 1 – ECON_1
(4)
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Economics
2021 Assignment 1
QUESTION 5
[15]
Learning outcome:
Supply and demand
5.1
Use a diagram to illustrate how each of the following events affect the
equilibrium price and quantity of pizza.
a.
The price of mozzarella cheese rises.
(5)
b.
Consumers expect the price of pizza to fall next week.
(5)
5.2
Briefly explain what could possibly contribute to a decrease in demand for
pizzas.
(5)
QUESTION 6
[20]
Learning outcome:
Production and cost
Nkosi’s Frozen Yogurt is a small shop that sells cups of frozen yogurt in a university
town. Nkosi owns three frozen-yogurt machines. His other inputs are refrigerators,
frozen-yogurt mix, cups, sprinkle toppings, and, of course, workers. He estimates that
his daily production function when he varies the number of workers employed (and at
the same time, of course, yogurt mix, cups, and so on), is as shown in the
accompanying table.
Quantity of workers
0
1
2
3
4
5
6
Quantity of frozen yogurt (cups)
0
110
200
270
300
320
330
Nkosi pays each his workers R 80 per day. The cost of his other variable inputs is R 0.50
per cup of yogurt. His fixed cost is R 100 per day.
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Economics
2021 Assignment 1
6.1
Name the fixed inputs and variable inputs in the production of cups of frozen
yogurt.
(8)
6.2
Calculate variable and total cost for every level of output.
(12)
QUESTION 7
[14]
Learning outcome:
Consumer choice
7.1
Define marginal utility.
(2)
7.2
The table below shows Thabiso’s total utility from consumption of Spiderman
comic books - he is an avid collector. Calculate the values for marginal utility and fill
in the blanks in the marginal utility column.
Number of comics
0
1
2
3
4
5
(5)
Total utility
Marginal utility
100
190
270
330
380
7.3
Explain the law of diminishing marginal utility.
(2)
7.4
Does Thabiso experience the law of diminishing marginal utility from consuming
Spiderman comics? Justify your answer
7.5
(3)
Calculate the weighted marginal utility for three comic books if the price of a
comic book is R 20.
(2)
Economics 1 – ECON_1
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Economics
2021 Assignment 1
ASSIGNMENT RUBRIC FOR ASSIGNMENT 1
OLG Assignment page not completed in full
-1
No Content page: no headings nor page numbers
-1
Headings and numbering – not accurate and clear
-1
Incomplete sentences; bad structure, poor spelling, and grammar; not proofread
and edited
-1
Format of: Century Gothic Font, Size 11, 1.5 Spacing, not applied
-1
These are the minimum number of references REQUIRED per qualification level:
Qualification
Number of
references
Variety of references
Higher
Certificate
Minimum of 3
sources
Diploma
Minimum of 5
sources
BBA
Minimum of 7
sources
In addition to the study guide and prescribed textbook,
at least one academic textbook, academically
recognised internet source or academic journal article.
In addition to the study guide and prescribed textbook,
any academic textbook, academically recognised
internet source, and at least two academic journal
articles.
In addition to the study guide and prescribed textbook,
any academic textbook, academically recognised
internet source, and at least three academic journal
articles.
REFERENCING: Marking PENALTY between 0% and 20%
20%
15%
NO in-text referencing or reference list.
Minimal evidence of referencing (either in text or reference list). Reference
technique is not correctly applied. Provide at least ONE source per
question.
Evidence of referencing in text and/or reference list. Reference technique
not applied correctly to all provided reference. Not all text references are
10%
captured in the reference list. Not all the references in the reference list
appear in the text. Number of references consulted below minimum
requirements.
Evidence of, and application of correct referencing technique for in-text
5-9%
referencing. Evidence of application of correct refencing technique in the
reference list. Variety of references consulted
must be substantially above the minimum requirements.
All of the following are evident and 100% accurate: in-text referencing,
0%
reference list, number of required references consulted substantially
exceeded. Variety of references consulted.
ALL REFERENCES MUST BE ACADEMICALLY RECOGNISED SOURCES, USING CAUTION WITH
THE POPULAR PRESS AND AVOIDING WIKIPEDIA, INVESTOPEDIA, BLOGS & CHAT ROOMS
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