Fundamentals of Economics

Question 1

Assume that you are at Total sports buying a pair of sneakers. While you are there, they announce that sneakers are now on sale at 30% less. Based on this, you decide to buy two pairs instead of one pair of sneakers. Is this a (an)

a) increase in demand that shifts the demand for sneakers to the right b) increase in quantity demanded that is a downward movement along the demand curve for sneakers c) decrease in demand that shifts the demand curve for sneakers to the left d) decrease in quantity demanded that is an upward movement along the demand curve for sneakers?

Question 2

"Rob Mutimer, the chair of the National Pig Association (NPA), said Britain was facing an "acute welfare disaster" within a matter of weeks, with farmers forced to kill their livestock because of an acute shortage of butchers and slaughterers." Source: https://m.efeedlink.com/contents/10-05-2021/8116e574-de84-444a-9558-36253c91305a-0781.html

The shortage of butchers and slaughterers will have which of the following effects in the market for pork?

a) Shift the pork supply curve to the right. b) Shift the pork demand curve to the right. c) Cause a surplus of pork. d) Cause an increase in the price of pork.

Question 3

"As the economy picks up, demand for many inputs is outstripping supply, driving up prices for things as diverse as construction materials, energy, food ingredients, and semiconductors. Soon, that list will include Office 365 subscriptions." You might not have heard about it from your sales rep yet, but Microsoft quietly announced that starting March 1, 2022, it will hike the price of many of its enterprise Office 365 and Microsoft 365 subscriptions. (Consumer and education subscription prices aren't changing for now.)"

Source: https://www.cio.com/article/3634389/microsofts-office-365-price-increases-how-to-reduce-the-hit.html An increase in the price of Office 365 subscriptions above the equilibrium will...

a) Shift the Office 365 subscriptions' supply curve to the right. b) Shift the Office 365 subscriptions' demand curve to the right. c) Cause a surplus of Office 365 subscriptions. d) Cause a shortage of Office 365 subscriptions.

Question 4

"Citing credible industry sources, Attard Montalto said that in Durban's economic zone R1.5 billion in stock has been lost, with R15 billion in damages to property. He said that 50,000 informal traders and 40,000 businesses have likely been impacted by the violence and looting. He warned that as many as 150,000 jobs are at risk, meaning as many as 1.5 million homes are without incomes..."

The loss of employment as result of the looting experienced in the Durban area will have which of the following impacts on Durban's production possibilities frontier assuming that only the industries affected are depicted on it?

Source: https://businesstech.co.zaews/government/506136/economic-impact-of-riots-and-looting-in-southafrica- and-wider-emerging-problems

a) An outward shift of the production frontier b) An inward shift of the production frontier. c) No change in the production possibilities frontier. d) An inward swivel of the production possibilities frontier.

Question 5

The following diagram illustrates the impact of an increase in demand. Which of the following statements is INCORRECT?

S/hr S 12 11 -NOAUO O00 D 2 4 6 8 10 12 14 16 18 Q (thousands of workers)