Tutorial 6 – 2022
Written Question
1. Draw a set of demand curves from the demand schedule given below and
answer the questions that follow from it.
a. what is the quantity demanded in this market when the price of the
good is R1.00?
b. whose demand does NOT conform to the law of demand
Price of the good Ayanda Andile Asanda Ayabulela
R0.00 20 16 4 8
0.50 18 12 6 6
1.00 14 10 2 5
1.50 12 8 5 4
02.00 6 6 0 2
2.50 0 4 0 0
MCQ Questions
1. For whom is the good a normal good?
A) for Ayanda
B) for Andile
C) for Asanda
D) for all four demanders
E) This cannot be determined from the demand schedule above.
2. The unique point at which demand curve and supply curve intersect is called
A) point of interest
B) market harmony.
C) coincidence
D) cohesion
E) equilibrium
3. Another term for equilibrium price is
A) ideal price
B) market-clearing price
C) dynamic price.
D) quantity-defining price
E) satisfactory price
4. All grapefruit juice producers have decided to blend orange juice with the
grapefruit juice. This blend results in a higher cost of production, but studies and
surveys show that consumers prefer the taste of the blend to straight grapefruit juice.
What will happen to the equilibrium price and quantity of the “new” blended juice?
A) Price and quantity will both increase.
B) Price will decrease but quantity will increase.
C) Price will increase, but quantity will decrease.
D) The effect on price is uncertain but quantity will increase.
E) Price will increase, but the effect on quantity is uncertain.
Consider the figure below and answer the following questions
5. At the price of R15,
A) We would achieve maximum producer surplus
B) there would be a shortage of 400 units
C) there would be a surplus of 400 units.
D) there would be a shortage of 200 units
E) there would be an excess demand of 200 units.
6. At the price of R35
A) there would be a shortage and the price would tend to fall from R35 to a lower
price
B) there would be a surplus and the price would tend to rise from R35 to a higher
price
C) there would be a surplus and the price would tend to fall from R35 to a lower price
D) there would be a market-clearing quantity of 200 units
E) there would be excess demand and the price would tend to fall from R35 to a
lower price
7. In the figure above, equilibrium price and quantity are
A) R25 and 400 units respectively
B) R35 and 200 units respectively
C) R15 and 600 units respectively
D) R30 and 300 units respectively
E) Not clear because not enough information is given.
8. Holding demand constant, a reduction in the price of inputs for producing
cellphones will cause:
A) both the equilibrium quantity and equilibrium price for cellphones to decrease
B) both the equilibrium quantity and equilibrium price for cell phones to increase
C) the equilibrium quantity for cellphones to increase, and its equilibrium price to
decrease
D) the equilibrium quantity for cellphones to decrease, and its equilibrium price to
increase
E) neither an increase nor a decrease in the equilibrium quantity and equilibrium
price for cellphones.
9. If, in the market for roses, demand decreases as a result of a decline in their
romantic appeal, but at the same time, the flower producers are hit by excessive
rains, which hinders their output then:
A) the equilibrium quantity and price of roses will both decrease.
B) the equilibrium quantity and price of roses will both increase.
C) the equilibrium quantity of roses will decrease, but the change in the equilibrium
price is uncertain.
D) the equilibrium price of roses will increase, but the change in equilibrium quantity
is uncertain.
E) the change in both the equilibrium quantity and the price of roses is uncertain.
