MTN-SA 15:08 * 40%. Done BCoM IT Year 1 PH JULY 2018... (A QUIESTION in each of

Question

MTN-SA 15:08 * 40%. Done BCoM IT Year 1 PH JULY 2018... (A QUIESTION in each of the following canes only one answer h correct Write the letter that represents the corect aswer, next to each number.Eg 1.11a 20) 1 Which one of the folowing statements is incorrect? aOut wants are unlimited. b) Our needs are limited e) Atypical esample of market demand is a demand (daim) by a trade union for increased wages. d) People demand onlythe things that they want 12 The diagram below shows an economy's production possibilities for two goods aeroplanes and motor vehicles. Use this diagram to answer the question below With reflerence to the above production possibilities froter, wecan say that a) The opportunity cost of producing 0amotor vehicles is b aeroplares b The opportunity cost of producing one more motor vehicle is higher atfthan atg d The opportunity cost of producing one more aeroplane is higher at g than af d) The opportunity cost of producing Oa motor vehicles is cb aeroplanes 13 in the market for public transport, which of the following variables would decrease demand, ceteris a) An ncrease ", price of private motor vehicles. b) Adecrease in the price of private motor vehicles ) An increase in price of private motor vehicle service plam d) Adecrease in the price of bus tyres 1.4 Fresh cream a substmtefor ice-cream and waffles are complement of both if the prot 0neoream als, one can expect that a) The dem and for fresh eam will increase and the quantty of waffles demanded w increase b) ne demand for fresh eam will decrease and the demand for waMes wil increase. ne quantity offresheam demanded wa decrease and the demand for wames will increase. d· The quantity of freshcream demanded wa decrease and the quantity of waffle, dmanded will

Explanation / Answer

1.1

It is true that our wants are unlimited and needs which we actually require are limited and people demand only those goods which they want to consume. A market demand is the aggregate of all the individual demands of all the consumers in the market.

The correct option is c

1.2

The given graph is Production possibility frontier(PPF) which depicts the trade-off between the production of two goods and its slope gives the opportunity cost of producing one good in terms of the other. At point g, the opportunity cost of producing oa units of the motor vehicle is cb units of airplanes.

the correct option is d

1.3

Ceteris paribus, demand is inversely related to the price of a good. In a market of public transport. A decrease in the price of a private motor vehicle would decrease its demand as a private motor vehicle and public vehicle are substitutes.

the correct option is b

1.4

Fresh cream is a substitute of ice cream while waffles are complements to both. If the price of ice cream falls, one can expect that the demand for fresh cream would decrease and demand for waffles would increase.

the correct option is b

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