This multiple-choice examination paper consists of 21 pages plus instructions for the completion of a
mark-reading sheet.
This question paper consists of 70 multiple-choice questions that must all be answered on the markreading sheet, which is supplied. Carefully follow the instructions for the completion of the markreading sheet. Each question will be worth 1,4 marks, so that the paper carries a total of 100 marks.
NB! NB! NB!
Students registered for ECS1501 must use unique number 469438 on the mark-reading sheet.
Students registered for REC101X must use unique number 499600 on the mark-reading sheet.
Place the completed mark-reading sheet in your answer book. DO NOT STAPLE IT TO THE
ANSWER BOOK.
Please complete the attendance register on the back page, tear off and hand to the invigilator.
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This examination paper remains the property of the University of South Africa and may
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Page 2 of 21
1.
Economics is the study of how
[1]
[2]
[3]
[4]
2.
ECS1501/REC101X
October/November 2011
to fully satisfy our unlimited wants.
society manages its scarce resources.
to reduce our wants until we are satisfied.
to avoid having to make trade-offs.
Points on the production possibilities curve (PPC) are
[1]
[2]
[3]
[4]
efficient
inefficient
unattainable
normative
Use figure 1 below to answer Questions 3-5.
Figure 1
Bacon
50
4
0


3
0

E
20


10
0
3.
10
20
30
40
50

60
70
Eggs
If the economy is operating at Point C, the opportunity cost of producing an additional 15 units
of bacon is
[1]
[2]
[3]
[4]
10 units of eggs.
20 units of eggs.
30 units of eggs.
40 units of eggs.
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Page 3 of 21
4.
ECS1501/REC101X
October/November 2011
If the economy were operating at point E,
[1]
[2]
[3]
[4]
the opportunity cost of 20 additional units of eggs is 10 units of bacon.
the opportunity cost of 20 additional units of eggs is 20 units of bacon.
the opportunity cost of 20 additional units of eggs is 30 units of bacon.
20 additional units of eggs can be produced with no impact on bacon production.
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Page 4 of 21
5.
Point F represents
[1]
[2]
[3]
[4]
6.
7.
8.
a combination of production that can be reached if we increase the production of eggs by
20 units with the current resources available.
a combination of production that is inefficient because there are unemployed resources.
a combination of production that can be reached if technology becomes outdated.
None of the above.
Which of the following statements represent(s) macroeconomic issues?
a.
b.
c.
Whether the production possibility curve shifts outward over time.
Whether the economy is operating on the production possibility curve or inside it.
The choice whether to produce more televisions than radios or more radios than
televisions (in other words, where to produce on the production possibility curve).
[1]
[2]
[3]
[4]
Statements a & c
Only statement b
Statements a & b
Only statement c
Which of the following statements represents positive statements?
a.
b.
c.
The best policy is one that will maximise the rate of economic growth for the country.
Government policies give higher priority to curing inflation than to curing unemployment.
If the government gave higher priority to curing unemployment, that would be popular with
the electorate.
[1]
[2]
[3]
[4]
Statements a & c
Only statement b
Only statement c
Statements b & c
The demand curve slopes downward from left to right because of
[1]
[2]
[3]
[4]
9.
ECS1501/REC101X
October/November 2011
the law of supply.
the law of demand.
comparative advantage.
the fact that increases in income leads to increased purchases.
If an increase in the price of Dolce and Gabanna jackets causes the demand curve for Roxy
jackets to shift to the right, then
[1]
[2]
[3]
[4]
Dolce and Gabanna jackets and Roxy jackets are substitutes.
Dolce and Gabanna jackets and Roxy jackets are complements.
the price of Dolce and Gabanna jackets are lower than the price of Roxy jackets.
Roxy jackets are a normal good.
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Page 5 of 21
ECS1501/REC101X
October/November 2011
Use figure 2 to answer question 10.
Figure 2
10.
Which of the following would cause a shift in the demand for pizza from D1 to D2?
[1]
[2]
[3]
[4]
11.
an increase in the price of hamburgers, a substitute in consumption
a decrease in the price of mozzarella cheese, a complement in production
a decrease in the price of pizzas
a decrease in the future price of pizzas
Which of the following will not shift the supply for watches to the right?
[1]
[2]
[3]
[4]
an advancement of technology used to produce watches
a decrease in the wages of workers employed to manufacture watches
an increase in the number of manufacturers for watches
manufacturers' expectations of higher future prices of watches
Use table 1 to answer question 12.
Table 1: The 2009 demand-and-supply schedules for taxi rides in Antananarivo, Madagascar
Price in
Excess
Pressure on
Malagasy Ariary
Quantity
Quantity
(Demand or
Price
(MGA)
Demanded
Supplied
Supply)
↓ or ↑
0
0
60 demand
1
0
38 demand
2
25
0
3
40
25 supply
4
55
45 supply
5
5
60
55 supply
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Page 6 of 21
12.
ECS1501/REC101X
October/November 2011
Based on the data in table 1, which one of the following options is correct?
[1]
[2]
[3]
[4]
At a price of 4 MGA, commuters demanded 10 rides, which caused downward pressure
on the price of taxi rides.
At a price of 5 MGA, consumers demanded 5 rides and taxis supplied 60 rides, which
caused upward pressure on the taxi ride fare.
At a price of 3 MGA, commuters demanded 65 taxi rides causing downward pressure on
the price of taxi rides.
At zero price, commuters demanded zero rides and there was no pressure on the price of
taxi rides.
Use figure 3 to answer questions 13-15.
Figure 3
13.
At price P3 in figure 3,
[1]
[2]
[3]
[4]
14.
At price P2 which of the following is not true?
[1]
[2]
[3]
[4]
15.
the market is in equilibrium.
there will be a surplus of Q4 – Q1.
there will be a tendency for prices to rise.
the quantity traded is Q4.
The market will be in equilibrium.
The quantity demanded is equal to the quantity supplied.
Demand equals supply.
There is no surplus.
At price P1,
[1]
[2]
[3]
[4]
consumers will be able to buy all they want.
producers will be unwilling to sell any goods.
a surplus will exist.
producers will be able to sell all they plan to.
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Page 7 of 21
ECS1501/REC101X
October/November 2011
Use the set of figures below to answer question 16 and 17.
Figure Set 4
16.
Figure set 4 shows the market for gasoline. Which figure(s) shows the effect of an increased
preference for cars that are smaller and more fuel efficient?
[1]
[2]
[3]
[4]
17.
figure A
figure B
figure C
figure D
Figure set 4 shows the market for gasoline. Which figure(s) shows the effect of a decision by
the OPEC countries in the Middle East to export less oil to the rest of the world?
[1]
[2]
[3]
[4]
figure B
figure C
figure D
figures B and C
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Page 8 of 21
18.
ECS1501/REC101X
October/November 2011
Coffee and sugar are complements in consumption. If a poor sugar harvest leads to an increase
in the price of sugar, there will also be
[1]
[2]
[3]
[4]
19.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
20.
[2]
[3]
[4]
a shift in the demand curve for bicycles.
a temporary surplus of bicycles.
a permanent surplus of bicycles.
an increase in the price of a bicycle.
Consider gardening books. What will happen to the market for these books as gardening
becomes more popular and printing costs increase simultaneously?
[1]
[2]
[3]
[4]
23.
If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream
cones will decrease.
If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity
of ice cream cones will increase.
If ice cream cones are an inferior good, then the equilibrium price for ice cream cones
will increase and the equilibrium quantity of ice cream cones will decrease.
If ice cream cones are an inferior good, then the equilibrium price and quantity of ice
cream cones will decrease.
Bicycles are made out of steel. If the price of steel increases, there is a shift in the supply curve
of bicycles that leads to
[1]
[2]
[3]
[4]
22.
When demand increases, both the equilibrium price and quantity increase.
When demand decreases, the equilibrium price rises and the equilibrium quantity
decreases.
When supply increases, the equilibrium quantity decreases and the equilibrium price rises.
When supply decreases, both the equilibrium price and quantity decrease.
What will happen to the equilibrium price and equilibrium quantity for ice cream cones when
consumers’ incomes decrease?
[1]
21.
an increase in the equilibrium price of coffee.
a decrease in the equilibrium price of coffee.
a rightward shift in the demand curve for coffee.
a leftward shift of the supply curve of coffee.
The equilibrium price of gardening books definitely increases.
The equilibrium quantity of gardening books definitely increases.
The equilibrium price of gardening books might increase or decrease.
The equilibrium quantity of gardening books definitely stays the same.
When the demand increases and the supply decreases, then the equilibrium price ____ and
the equilibrium quantity ____.
[1]
[2]
[3]
[4]
rises; decreases
falls; increases
rises; probably changes but the direction of the change cannot be determined
probably changes but the direction of the change cannot be determined; increases
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Page 9 of 21
24.
ECS1501/REC101X
October/November 2011
What will happen to the equilibrium price and quantity of coffee if it’s discovered that coffee
helps to prevent colds and, at the same time, Brazil and Vietnam emerge in the global market as
massive producers of coffee?
[1]
[2]
[3]
[4]
The price will fall while the effect on the quantity is uncertain.
The quantity will increase while the effect on the price is uncertain.
The quantity will decrease and the price will rise.
The quantity will increase while the price will remain unchanged.
Figure 5
25.
Figure 5 represents the market for chocolate. People become more concerned that eating
chocolate causes them to gain weight, which they do not like. As a result, the
[1]
[2]
[3]
[4]
demand curve shifts from D2 to D1 and the supply curve will not shift.
demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2.
demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1.
demand curve will not shift, and the supply curve shifts from S1 to S2.
Figure 6
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Page 10 of 21
26.
In figure 6, if the minimum wage is set at R25.00 per hour, what effect will it have on the market
for low-skilled labour?
[1]
[2]
[3]
[4]
27.
[4]
positive because the goods are complements.
negative because the goods are complements.
positive because the goods are substitutes.
negative because the goods are substitutes.
The income elasticity of demand for bicycles is +10, which implies that bicycles are
[1]
[2]
[3]
[4]
31.
facing an inelastic demand should always raise its price.
facing an elastic demand should always raise its price.
a firm should always charge the highest price possible regardless of the elasticity of
demand.
None of the above answers are correct.
The cross elasticity of demand for pizza with respect to the price of a soft drink is
[1]
[2]
[3]
[4]
30.
the price elasticity of demand is equal to zero.
demand is perfectly inelastic.
the demand curve for salt is horizontal.
Both options [1] and [2] are correct.
To maximise its revenue, a firm
[1]
[2]
[3]
29.
The minimum wage will have no effect when set above the equilibrium wage rate.
The minimum wage will generate a surplus of low-skilled labour.
The minimum wage will generate a shortage of low-skilled labour.
The minimum wage will attract more labour to the low-skilled labour market and cause the
wage rate to fall.
If the price of salt increases and the quantity demanded does not change, then
[1]
[2]
[3]
[4]
28.
ECS1501/REC101X
October/November 2011
an inferior good.
a normal good.
a substitute good for motorbikes.
a complementary good for motorbikes.
A local pizzeria raised its price from R90 to R110 for each pizza and the sales of its pizza
decreased from 150 per day to 100 per day. What is the price elasticity of demand in this case if
we use the arc elasticity method to calculate the price elasticity?
[1]
[2]
[3]
[4]
2/3
–2,5
2
3/2
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Page 11 of 21
32.
ECS1501/REC101X
October/November 2011
Which one of the following options correctly explains the way in which economists view utility?
[1]
[2]
[3]
[4]
Cardinal utility can be measured in some way; ordinal utility involves the ranking of
different combinations while cardinal utility is the core of the indifference curve approach.
Ordinal utility can be measured in some way; cardinal utility involves the ranking of
different combinations while ordinal utility is the core of the indifference curve approach.
Ordinal utility can be measured in some way; cardinal utility involves the ranking of
different combinations while cardinal utility is the core of the indifference curve approach.
None of the above is correct.
Question 33 is based on the figure below.
Figure 7
33.
Which one of the following is incorrect?
[1]
[2]
[3]
[4]
34.
The marginal rate of substitution at point B is given by the slope of the indifference curve at
point B.
The marginal rate of substitution at point B is given by the slope of a tangent at point B.
If the marginal rate of substitution is unchanged over the length of the indifference curve,
then the two products are perfect substitutes.
Indifference curves can be tangent but can never intersect.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
The slope of the budget constraint is determined by the marginal rate of substitution.
The slope of the budget constraint is determined by the ratio of the marginal utilities of the
two goods.
The slope of the budget constraint is determined by the prices of the two goods.
The slope of the budget constraint is determined by the size of the consumer’s income.
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Page 12 of 21
35.
ECS1501/REC101X
October/November 2011
The consumer will be in equilibrium when
[1]
[2]
[3]
[4]
MRS = Pproduct x /Pproduct y
MCL = MRP
MR = MC
Qd = Qs
Question 36 is based on figure 8 below. In the figure only the price of bread changed.
Figure 8
36.
The shift of the budget constraint AB to A1B1 could be the result of
[1]
[2]
[3]
[4]
37.
The consumer will maximise his/her total utility only when
[1]
[2]
[3]
[4]
38.
a decrease in the income of the consumer.
a decrease in the price of bread and a decrease in the income of the consumer.
an increase in the price of bread and an increase in the income of the consumer.
a decrease in the price of bread and an increase in the income of the consumer.
the budget constraint intersects the highest possible indifference curve.
MRS = Pbread /Pmilk
the budget constraint is tangent to the highest possible indifference curve.
both products are normal goods.
Which one of the following is incorrect?
[1]
[2]
[3]
[4]
TR = P x Q
AR = TR ÷ P
TR = AR x Q
MR = ∆TR ÷ ∆Q
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Page 13 of 21
39.
Which one of the following is correct?
[1]
[2]
[3]
[4]
40.
All the costs of a firm should be valued at their opportunity cost.
The fact that one input is fixed in the short run means that production cannot be increased
in the short run.
The total economic cost of production excludes profit because profit is the positive
difference between revenue and cost.
When total revenue is equal to total cost, the owner’s remuneration is zero.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
41.
ECS1501/REC101X
October/November 2011
As long as the average product increases, the marginal product is higher than the average
product.
The average product intersects the marginal product at its maximum point.
As long as the marginal product decreases the average product runs below the marginal
cost.
When total production reaches a maximum, the average fixed cost is zero.
Which of the following statements on production and the law of diminishing returns is/are
correct?
a.
b.
c.
Production is the physical transformation of inputs into output.
The law of diminishing returns applies to the long run when all the inputs are variable.
The average and marginal product curves are u-shaped because, as more units of the
variable input is employed, production will first decrease before it rises sharply.
[1]
[2]
[3]
[4]
Only a and b
Only a
Only b
Only c
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Page 14 of 21
ECS1501/REC101X
October/November 2011
Questions 42 and 43 are based on figure 9 below.
Figure 9
42.
Which one of the following options is correct?
The total cost of producing the output OG is
[1]
[2]
[3]
[4]
43.
OG x GD
OG x GE
OG x GF
The total cost of production cannot be determined with the given information.
Which of the following statements is/are correct?
a.
b.
c.
The total fixed cost can be calculated as EF x OG.
The total fixed cost can be calculated as DE x OG.
The total fixed cost can be calculated as AB x OC.
[1]
[2]
[3]
[4]
All the statements are correct.
Only a
Only a and c
Only c
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Page 15 of 21
44.
ECS1501/REC101X
October/November 2011
Which one of the following options is correct?
Perfect competition exists if
[1]
[2]
[3]
[4]
45.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
46.
there is a large number of buyers and sellers of the product and some government
intervention.
there is collusion between sellers and all goods sold in the market are homogeneous.
all the buyers and sellers have perfect knowledge of market conditions and all factors of
production are perfectly mobile.
there is no government intervention and individual buyers and sellers determine the market
price.
The firm under perfect competition will maximise its profit where the AVC is at a minimum.
The firm under perfect competition will maximise its profit where the MR is equal to the
price of the product.
The firm under perfect competition will maximise its profit where the MR is equal to the
MC.
If the market price decreases, the firm will increase production to maintain its profit.
The demand curve for the product of the firm under perfect competition
[1]
[2]
[3]
[4]
slopes downwards from top left to bottom right.
is indicated by a horizontal line at the given market price.
is indicated by a vertical line.
has a positive slope.
The table below depicts the production cost of a perfectly competitive firm in Rand. Complete the table
and answer questions 47 and 48.
Table 2
Q
TFC
TVC
TC
AC
MC
0
1
100
140
2
100
3
4
47.
100
480
Which one of the following options is correct?
[1]
[2]
[3]
[4]
The TC to produce three units is R330.
The TC to produce three units is R280.
The MC to produce the fourth unit is R120.
The average fixed cost to produce four units is R25.
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Page 16 of 21
48.
ECS1501/REC101X
October/November 2011
If the market price of the product is R180, how many units should the firm produce to maximise
its profit?
[1]
[2]
[3]
[4]
49.
2
3
4
None of the above.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
A perfectly competitive firm’s profit per unit of output is given by the vertical difference
between marginal revenue and marginal cost.
A perfectly competitive firm’s profit per unit of output is given by the difference between
average variable cost and marginal cost.
Normal profit refers to a situation in which implicit and explicit costs are covered.
When the perfectly competitive firm makes an economic profit in the short run new firms
will immediately enter the industry.
Questions 50 and 51 are based on figure 10 below. The figure depicts the cost and revenue curves
of a perfectly competitive firm.
Figure 10
50.
Which one of the following options is correct?
At a price of R40
[1]
[2]
[3]
[4]
TR = R400.
Total economic profit = R50.
TVC = R280.
AFC =R7.
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Page 17 of 21
51.
Which of the following statements is/are correct?
a.
52.
b.
c.
The short-run supply curve of the firm is the increasing part of the marginal cost curve
from point e upwards.
Point d is the break-even point, where total cost is equal to total revenue.
Point e is the close-down point.
[1]
[2]
[3]
[4]
Only a and b
Only a
Only c
None of the above statements is correct.
Which one of the following options is correct?
[1]
[2]
[3]
[4]
53.
If firms are making economic profit in the short run, the supply curve of the product will
shift to the right and the price will increase in the long run.
If firms are making economic profit in the short run, the price of the product will not change
in the long run because the firm is a price taker.
If firms are making economic losses in the short run, the supply curve of the product will
shift to the left and the price will increase in the long run.
If normal profits are made, the firm and industry are in equilibrium but the supply curve
will shift to bring the market in equilibrium.
Which one of the following options is incorrect?
[1]
[2]
[3]
[4]
54.
ECS1501/REC101X
October/November 2011
If a perfectly competitive firm is currently producing an output level where price is R5,
average variable cost is R4, average (total) cost is R4.50 and marginal cost is R5, this
firm should increase its output to maximise profits.
A perfectly competitive firm is currently producing an output level where price is R6,
average variable cost is R4, average (total) cost is R5, and marginal cost is R7. In order to
maximise profits this firm should decrease output.
Suppose a perfectly competitive firm is currently producing an output level where price is
R5, average variable cost is R3, average (total) cost is R4, and marginal cost is R4. In
order to maximise profits this firm should increase output.
The perfectly competitive firm will continue production even when a loss smaller than the
total fixed cost is incurred.
If a firm in a perfectly competitive market sets the price higher than the market price, then
[1]
[2]
[3]
[4]
sales will decrease only slightly because of the shape or slope of the market demand
curve.
sales will remain unchanged.
sales will drop to zero (0) and nothing will be sold.
all the other firms will do the same.
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Page 18 of 21
55.
ECS1501/REC101X
October/November 2011
Which one of the following options is incorrect?
A characteristic of a market structure is
[1]
[2]
[3]
[4]
56.
The two broad categories of imperfect competition is
[1]
[2]
[3]
[4]
57.
oligopoly and imperfect competition.
monopolistic competition and monopoly.
oligopoly and monopolistic competition.
oligopoly and monopoly.
Which one of the following options is incorrect?
[1]
[2]
[3]
[4]
58.
the number of buyers and sellers.
price determination.
the number of firms.
the nature of the product.
Information is complete under perfect competition and monopoly.
The demand curve for the product of the firm is downward-sloping under monopolistic
competition and monopoly.
Collusion is possible under monopolistic competition and oligopoly.
Entrance is not blocked under perfect competition and monopolistic competition, while
entrance is blocked under monopoly.
Suppose a monopoly sells 5 units per day at a price of R3, and that the monopolist can sell six
units per day at R2,50 each. The marginal revenue for the 6th unit sold is:
[1]
[2]
[3]
[4]
R2,50
R3,00
zero
uncertain, as there is not enough information to calculate the marginal revenue.
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Page 19 of 21
ECS1501/REC101X
October/November 2011
Figure 11
The figure above shows the equilibrium position of a monopolist in the short run. Study the figure and
answer the question that follows.
59.
In the short run, the monopolist’s profit is maximised by
[1]
[2]
[3]
[4]
producing Q1 units at price P1.
producing Q2 units at price P2.
producing Q3 units at price P3.
producing Q4 units at price P4.
Questions 60 and 61 are based on the table below which represents a monopolist’s cost and revenue
data.
Quantity
Price
0
2
4
6
8
10
12
14
45
42
39
36
33
30
27
24
Source:
Total
Revenue
(TR)
0
84
156
216
264
300
324
336
Table 3
Total
Profit
Costs
(TC)
100
-100
114
-30
136
20
166
50
204
60
250
50
304
20
366
-30
Average
Costs
(AC)
Marginal
Revenue
(MR)
Marginal
Cost
(MC)
57
34
27,7
25,5
25
25,3
26,1
42
36
30
24
18
12
6
7
11
15
19
23
27
31
National Council on Economic Education: 2008
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Page 20 of 21
60.
ECS1501/REC101X
October/November 2011
In the short run, a profit-maximising monopolist would continue to expand production up to
_____________units of output.
[1]
[2]
[3]
[4]
61.
At the level of output calculated in question 60, above the monopolist’s economic profit per unit
is
[1]
[2]
[3]
[4]
62.
monopolistic competition, firms can differentiate their products.
perfect competition, firms can differentiate their products.
monopolistic competition, entry into the industry is blocked.
monopolistic competition, there are relatively few barriers to entry.
If nominal wages increase by an average of 8 percent per annum and the prices of goods and
services increase by an average of 3 percent per annum, this implies
[1]
[2]
[3]
[4]
65.
the efficient output level will be produced in the long run.
firms will produce at maximum average cost.
all firms realise diseconomies of scale.
firms will only earn a normal profit.
Monopolistic competition differs from perfect competition primarily because in
[1]
[2]
[3]
[4]
64.
R7, 50
R5, 00
R3, 50
R2, 00
The long-run equilibrium outcomes in monopolistic competition and perfect competition are
similar, because in both market structures
[1]
[2]
[3]
[4]
63.
4
6
8
10
an increase in real wages of about 11%.
a decrease in real wages of about 5%.
an increase in real wages of about 5%.
an increase in money wages of about 11%.
Which one of the following will increase the supply of labour in a particular industry?
[1]
[2]
[3]
[4]
Non-monetary benefits are reduced.
The wage rate is increased.
Wages in other occupations are reduced.
Workers die due to HIV/Aids.
[TURN OVER]
Page 21 of 21
ECS1501/REC101X
October/November 2011
Questions 66 and 67 are based on the following information on the monthly production of leather
shoes by Bata Shoe Company. Complete Table 4 below and answer the two questions that follow:
Number of
workers
(N)
1
2
3
4
5
6
66.
67.
Price per pair of
shoes in Rand
(P)
Marginal
Revenue product
(MRP)
2000
50
10
68
76
5
3
a.
b.
c.
The marginal physical product of the second worker is equal to 30.
The marginal revenue product of the fifth worker is equal to 1000.
At a wage rate of R500 the firm will maximise its profit by employing 6 workers.
[1]
[2]
[3]
[4]
Only a
Only b
Only c
Only a and b
At a wage rate of R500 the firm is in equilibrium when it employs _____ workers.
2
3
4
5
The market demand curve for labour will shift to the right, ceteris paribus, because of
[1]
[2]
[3]
[4]
69.
Table 4
Marginal
physical product
(MPP)
20
Which of the following statement(s) is/are correct?
[1]
[2]
[3]
[4]
68.
Total physical
product
(TPP)
a decrease in the number of firms.
an increase in the price of the product.
an increase in the price of a complementary factor of production.
a decrease in the productivity of the workers.
When the trade unions restrict the labour supply, then
[1]
[2]
[3]
[4]
the demand curve for labour shifts to the right.
workers receive a lower wage rate.
an increase in unemployment occurs.
the supply curve for labour shifts to the right.
[TURN OVER]
Page 22 of 21
70.
ECS1501/REC101X
October/November 2011
The imposition of an effective minimum wage above the equilibrium wage could cause
[1]
[2]
[3]
[4]
an increase in the quantity of labour demanded.
an excess supply of labour.
a decline in unemployment.
the level of employment not to change.
TOTAL:
©
Unisa 2011
1. 2
2. 1
3. 2
4. 4
5. 4
6. 3
7. 4
8. 2
9. 1
10. 1
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
4
1
2
3
4
2
2
2
1
1
21. 4
22. 1
23. 3
24. 2
25. 1
26. 2
27. 4
28. 1
29. 2
30. 2
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
3
4
4
3
1
4
3
2
1
1
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
2
2
3
3
3
2
4
3
3
4
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
4
3
1
3
1
3
3
3
2
3
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
1
4
1
3
3
1
4
2
3
2
100