Please indicate whether you think each of the following statements is true or false. If yout 1. I\" Puce hink the statement is false, you briefly need to explain why. Jack is hungry and he wants a sandwich. Thus, Jack has a demand for a sandwich. In a competitive market, a single seller can influence the price An increase in quantity demanded is shown by an outward shift of the demand curve Consider the following statement: "So far this year, airlines have been able to raise fares but still fill their planes. Source: The New York Times, June 10, 201 1 This statement implies that the law of demand doesn't work in the real world The price of 1 kg apples, which was R24 last month, is R30 today. Thus, the demand curve for apples will shift leftward. Consider the market for burgers in Johannesburg, where there are over a thousand burger joints at any given moment. Suppose an innovation in meat processing technology makes it possible to produce more burgers at a lower cost than ever before. Holding all else constant, this will lead to a change in quantity supplied Numetro cinema charges a lower admission price for the first show on weekday afternoons than they do for a weeknight or weekend show because the supply of seats in the theatre is greater on a weekday afternoon and the demand to see the movie is lower for the weekday afternoon showing. A rise in wage rate will decrease supply of cell phones in the market Consider the graph of the market for long life milk below: 50 100 150 200 Quantity A price of $20 will lead to a quantity demanded of 100 units and quantity supplied of 200 units of long life milk 10.Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are substitutes in production. 1.1 Explain the law of supply and two reasons why we observe it [5 marks] 1.2 A severe drought has negatively affected the harvest of grapes in the Western Cape this season. All else constant, explain graphically and in words your prediction of the impact of this on the current supply of wines. Be sure to label all axes and graphs.[5 marks] 2.1 Define what is meant by a complement in consumption and give an example. [2 marks] 2.2 Define what is meant by a substitute in consumption and give an example. [2 marks] 2.3 If the price of a tub of butter rises, all else held constant, what happens to the demand for margarine? [2 marks] 2.4. Consider the demand curve for Sedans in South Africa. For simplicity, assume that all sedans are identical and sell for the same price. Also. assume that: The current market price of Sedans is R90,000 Average Household income is R180,000 per year Price of a litre of petrol is R20 per gallon Price of a bus ride is R30 Suppose the price of a sedan decreased from R90,000 to R75,000. This would cause a the demand curve. If an increase in average income causes a rightward shift of the demand curve, then you may conclude that sedans are a good. Suppose that the price of a litre of petrol rises from R20 to R30. Because sedans and petrol are , an increase in the price of a litre of petrol shifts the demand curve for sedans to the [4 marks]