Economics 2B - DEPARTMENT OF ECONOMICS AND ECONOMETRICS ECONOMICS 2B FINAL ASSESSMENT NOVEMBER 2015 APK SOWETO CAMPUSES DATE ATTENDANCE SLIP Surname

Economics 2B - DEPARTMENT OF ECONOMICS AND ECONOMETRICS...

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DEPARTMENT OF ECONOMICS AND ECONOMETRICS ECONOMICS 2B FINAL ASSESSMENT: NOVEMBER 2015 APK & SOWETO CAMPUSES DATE: 31/10/2015 ATTENDANCE SLIP Surname: ………………………………………………… ............. Initials: ……………………………………………. ....................... Student number: …………………………….. ............................ Cell number: ............................................................................... This paper consists of 13 pages.
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Economics 2B Final Assessment: October/November 2015 Student number: ______________________________ 2 DEPARTMENT OF ECONOMICS AND ECONOMETRICS ECONOMICS 2B FINAL ASSESSMENT: NOVEMBER 2015 APK & SOWETO CAMPUSES DATE: 31/10/2015 MARKS: 100 TIME: 2 HOURS ASSESSORS: Prof G van Zyl, Ms JMM Viljoen & Me M Sekome MODERATOR: Dr P Bauer SURNAME INITIALS STUDENT NUMBER CELL NUMBER Mark schedule Mark Mark Mark Mark Mark Q1 Q2 Q3 Q4 Q5 1.1 [8] 2.1 [6] 3.1 [5] 4.1 [6] 5.1 [7] 1.2 [7] 2.2 [6] 3.2 [6] 4.2 [6] 5.2 [6] 2.3 [5] 3.3 [9] 4.3 [3] 5.3 [6] 2.4 [3] 5.4 [6] 5.5 [5] Total mark :
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Economics 2B Final Assessment: October/November 2015 Student number: ______________________________ 3 Question 1: Optimisation [15] 1.1 Sunsmile Bakeries is currently producing a high-fibre product but it is considering the introduction of a low-calorie product. The production division is of the opinion that i) low calorie bread requires 6 labour-hours of per production run, whereas high fibre bread requires 2 labour-hours per production run ii) low calorie bread requires 2 machine-hours per production run and high fibre bread also requires 2 machine- hours per production run iii) low calorie bread requires 4 units of packaging material and high fibre bread requires 12 units of packaging material per production run. During the production run the bakery has 24 labour-hours, 16 machine-hours and 48 units of packaging material available. The estimated cost per production run is R100 for low calorie bread and R50 for high fibre bread. (8) Task Answers State the primal problem. List the equations of the constraints. Determine the feasible region and indicate by means of an appropriate figure. Indicate the solutions for the corner points. Corner point Combinations Solution What is the best solution?
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Economics 2B Final Assessment: October/November 2015 Student number: ______________________________ 4 1.2 Sunsmile Bakeries Pty (Ltd) is the major supplier of fresh baked bread in the Erkuhuleni area. The firm is currently considering a pricing strategy and most probable an expansion program. The firm needs the help of an economist to advise it on various issues. The following information applies. The other major bakery in the area is Brightfresh Bakeries Pty (Ltd) . An impact study was done by the marketing department of Sunsmile Bakeries and the following scenarios emerged from their report. i) If Sunsmile increases the price with 7 cent per loaf and Brigtfresh refrains from increasing its price, Sunsmile could expect a 10% decrease in market share and Brightfresh an increase of 8% in market share. If Brightfresh matches the price increase both could expect a 4% increase in market share. ii) If Sunsmile increases the price with 5 cent per loaf and Brightfresh again refrain from increasing its price, Sunsmile could expect a decrease of 8% in market share and Brightfresh an increase of 6% in market share. If Brightfresh matches the increase both could expect a 7%
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