How often Price and income elasticity is asked

Where it was asked

What costs marks here

The questions

1. Oct/Nov 2017, Q5.13 marks

   This question relates to price elasticity of demand and cross elasticity of demand concepts. Imagine you own a spaza shop and have calculated that the price elasticity of demand for bread in your specific market is 0,5. Determine at which price your total revenue would be maximised — R10 or R8 — and provide an explanation for your answer.

2. Oct/Nov 2017, Q5.23 marks

   This question relates to price elasticity of demand and cross elasticity of demand concepts. Assume that the cross elasticity of demand between product A and product B is calculated to be -0,25. Based on this cross elasticity value, explain what type of relationship exists between product A and product B (i.e. what kind of goods they are).

3. Oct/Nov 2017, QB.162 marks · multiple choice

   This is Section B of the ECS1501 October/November 2017 examination, consisting of 35 compulsory multiple-choice items, each worth 2 marks (70 marks in total, 84 minutes allowed). For each item, select the correct option from those listed. Suzi sells cakes at a student centre and knows that raising the price reduces the quantity she sells, while lowering the price increases the quantity sold. As a student of economics, she has calculated that her cakes face a relatively elastic demand curve. What should Suzi do to increase her total revenue?

4. May/Jun 2017, Q3.13 marks

   A local shop called Burger Boet sells hamburgers, and the scenario examines how a price change affects demand and revenue. Burger Boet reduces the price of its hamburgers from R40 to R35, and as a result the quantity of hamburgers demanded rises from 800 to 1 150 units. Determine the price elasticity of demand for a burger at Burger Boet.

5. May/Jun 2017, Q3.23 marks

   A local shop called Burger Boet sells hamburgers, and the scenario examines how a price change affects demand and revenue. Using the price elasticity of demand value calculated for hamburgers at Burger Boet, explain how the shop could increase its total revenue earned from hamburger sales.

6. May/Jun 2017, Q4.13 marks

   This question relates to Sophie, a car owner whose monthly income and petrol consumption change. Sophie's monthly income rises from R12 000 to R16 000, and as a result the amount of petrol she buys for her car each month rises from 40 litres to 45 litres. Using this information, work out Sophie's income elasticity of demand for petrol.

7. May/Jun 2017, Q4.23 marks

   This question relates to Sophie, a car owner whose monthly income and petrol consumption change. Using the income elasticity of demand value you calculated for Sophie's petrol consumption in the previous part, explain what type of good petrol is (e.g. normal, inferior, luxury, necessity) based on that elasticity figure.

8. May/Jun 2017, QB162 marks · multiple choice

   This is Section B, the compulsory multiple-choice component of the ECS1501 May/June 2017 exam, consisting of 35 items worth 70 marks in total (2 marks each, since the paper does not print individual marks per item but states the section is compulsory). Given that socks and shoes are complements in consumption, which of the following values could represent the cross-price elasticity of demand between socks and shoes?

9. May/Jun 2016, Q281.43 marks · multiple choice

   Determine which one of the following statements is correct.

10. May/Jun 2016, Q291.43 marks · multiple choice

    Identify which one of the following statements is incorrect.

11. May/Jun 2016, Q301.43 marks · multiple choice

    Determine which one of the following statements is correct.

12. May/Jun 2016, Q311.43 marks · multiple choice

    When the price of a product increases by 5% and the quantity demanded of the product changes from 1 500 to 1 200, what is the price elasticity of demand of the product?

13. May/Jun 2015, Q291.4286 marks · multiple choice

    This is the ECS1501 (Economics IA) May/June 2015 examination, a closed-book, multiple-choice paper lasting 2 hours and worth 100 marks in total. It contains 70 questions that must all be answered on a mark-reading sheet using unique number 492522. The paper states each question carries 1,4 marks, though 70 Ă— 1,4 = 98, not 100; the exact weighting must therefore be 100/70 â‰Ë†1,4286 marks per question to reach the stated total of 100 - a minor internal inconsistency in the printed paper. Thabo spends R12 in the mornings on bus fare travelling from his house in Brooklyn to the Unisa library. In the afternoons, this same trip costs R11,50. The fact that the bus fare is more expensive during rush hour and less expensive during the afternoon implies something about the price elasticity of demand for the bus ride at each time. Determine what this implies about the demand for the bus ride in the morning compared with the afternoon.

14. May/Jun 2015, Q301.4286 marks · multiple choice

    This is the ECS1501 (Economics IA) May/June 2015 examination, a closed-book, multiple-choice paper lasting 2 hours and worth 100 marks in total. It contains 70 questions that must all be answered on a mark-reading sheet using unique number 492522. The paper states each question carries 1,4 marks, though 70 Ă— 1,4 = 98, not 100; the exact weighting must therefore be 100/70 â‰Ë†1,4286 marks per question to reach the stated total of 100 - a minor internal inconsistency in the printed paper. There is a proposal from Eskom to increase the electricity tariff during 2015 in order to increase revenue and aid operations. Determine the elasticity condition for the demand for electricity that would make this proposal possible.

15. May/Jun 2015, Q311.4286 marks · multiple choice

    This is the ECS1501 (Economics IA) May/June 2015 examination, a closed-book, multiple-choice paper lasting 2 hours and worth 100 marks in total. It contains 70 questions that must all be answered on a mark-reading sheet using unique number 492522. The paper states each question carries 1,4 marks, though 70 Ă— 1,4 = 98, not 100; the exact weighting must therefore be 100/70 â‰Ë†1,4286 marks per question to reach the stated total of 100 - a minor internal inconsistency in the printed paper. Given the water shortages observed in Gauteng in 2014, the South African government wants to reduce water consumption by 5 per cent. The price elasticity for water is 0,4. Determine what the government should do to achieve this reduction.

16. May/Jun 2015, Q321.4286 marks · multiple choice

    This is the ECS1501 (Economics IA) May/June 2015 examination, a closed-book, multiple-choice paper lasting 2 hours and worth 100 marks in total. It contains 70 questions that must all be answered on a mark-reading sheet using unique number 492522. The paper states each question carries 1,4 marks, though 70 Ă— 1,4 = 98, not 100; the exact weighting must therefore be 100/70 â‰Ë†1,4286 marks per question to reach the stated total of 100 - a minor internal inconsistency in the printed paper. If the price elasticity of demand for foot massagers is 0,5, determine the effect of a 10 per cent increase in price on the quantity demanded.

17. Oct/Nov 2014, Q231.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. Along a downward-sloping demand curve, at what point is the elasticity of demand equal to infinity?

18. Oct/Nov 2014, Q241.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. Using the price elasticity of demand formula and the following price and quantity data — at price P1 = R10 the quantity is Q1 = 100, and at price P2 = R8 the quantity is Q2 = 140 — calculate the price elasticity of demand.

19. Oct/Nov 2014, Q251.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. Based on the elasticity coefficient you calculated in the previous question (using P1=R10, Q1=100 and P2=R8, Q2=140), what does this coefficient imply about demand?

20. Oct/Nov 2014, Q261.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. All of the following are determinants of the degree of elasticity of demand, except one. Which of these is NOT a determinant of the degree of elasticity of demand?

21. Oct/Nov 2014, Q271.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. In what sense does price elasticity of demand differ from cross elasticity of demand?

22. Oct/Nov 2014, Q281.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. You are told that bread is classified as a staple food, consumed by over 99 per cent of South African households every morning at breakfast time, and that the demand for bread is inelastic. As a bread producer, what should you do in order to increase your total revenue?

23. Oct/Nov 2014, Q291.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. If a 5 per cent increase in the market price for shoes results in a 5 per cent decrease in total revenue, what can be concluded?

24. Oct/Nov 2014, Q301.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. Mpho likes to drink Pepsi. However, in the absence of Pepsi, Mpho prefers to drink Fanta. Based on this, what can be correctly concluded about the cross elasticity of demand in this case?

25. Oct/Nov 2014, Q311.4285714285714286 marks · multiple choice

    This is the multiple-choice section of the ECS1501 (Economics 1A) October/November 2014 examination, a closed-book, 2-hour paper worth 100 marks in total, for which a non-programmable pocket calculator may be used. The paper consists of 70 multiple-choice questions numbered 1 to 70 that must all be answered on the supplied mark-reading sheet using unique number 495584. The paper states that each question is worth 1,4 marks so that the 70 questions together make up the stated 100 marks (note: 70 × 1,4 = 98, not exactly 100, which appears to be a rounding inconsistency in the original paper). Below, each of the 70 individual multiple-choice items is reproduced, covering topics from basic economic concepts, demand and supply, elasticity, consumer theory, production and costs, market structures (perfect competition, monopoly, monopolistic competition) and labour markets. Goods for which demand is directly or positively related to income are referred to as which type of goods?