D unscrupulous landlords find ways of increasing the

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D. unscrupulous landlords find ways of increasing the actual price above the regulated price. E. tenants seek to maximise their marginal benefit above the regulated price. 5 S 1 Price per trip Quantity of trips/time S 0 a d c b e S 2 f D 1 D 0 D 2
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Use the information below to answer questions 12 and 13. A government official seeking to raise tax revenue decides to tax magazines at a fixed rate of R1 per unit. Prior to the implementation of the tax he observes that 5000 magazines are sold per month. 12. After implementing the tax he is surprised to find that his tax revenue is not R5 000 per month. What could be the reason for this? A. Perfectly price inelastic demand for magazines. B. The law of demand. * C. Price elastic supply of magazines. D. He implemented the tax on the sellers and not on the buyers. E. Magazines are an inferior good. 13. If the initial price of magazines was R30 each and the new quantity of magazines sold is 4 000 units per month, the point price elasticity of demand over this range is ________, and the tax revenue is ________. A. -0.167; R1 000 B. -6.78; R4 000 C. -6; R4 000 * D. -6.2; R5 500 E. -0.167; R5 500 14. Which of the following statements apply when subsidies are implemented in a particular market? i. There is no deadweight loss. ii. There is an increase in the consumer surplus. iii. There is an increase in output. iv. Market prices remain unchanged. A. All of the above. B. (i), (iii) and (iv) C. (ii) and (iv) D. (ii) and (iii) * E. (i), (ii) and (iii) 6
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15. Which of the following is not a determinant of the price elasticity of demand? A. The number of people demanding the good.* B. The number of substitutes available. C. Whether or not the good is a necessity. D. The amount of time elapsed (passed) since the price change. E. The proportion of income spent on the product. 16. The equilibrium price and quantity for mobile data was (R12/GB for 150 million GBs). After a new provider entered the market the price and quantity in equilibrium changed to (R10/GB for 240 million GBs). The arc price elasticity of demand is _____________, which means that the demand for mobile data is ______________. A. 2.5; price elastic * B. 2.1; price inelastic C. 2.0; price inelastic D. 1.9; price elastic E. 1.8; price inelastic 17. Michael is a cattle farmer in a small rural town who wishes to increase his revenue from selling cows. Currently, his price elasticity of demand is -0.73, and he sells 30 cows per year for R1500 each. Which of the following will happen if Michael increases the price of his cows to R1600? A. There will be a decrease in the quantity of cows demanded and his revenue will remain unchanged. B. There will be an increase in the quantity of cows demanded and his revenue will rise. C. There will be a decrease in the quantity of cows demanded, but his revenue will rise.* D. There will be a decrease in the quantity of cows demanded and his revenue will fall. E. Since cows are a necessity there will be no change in the quantity of cows demanded, and his revenue will rise. 7
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18. If the income elasticity of demand for petrol is 0.15, it means that a A. 0.15% increase in the petrol price is associated with a 1% increase in the quantity of petrol demanded.
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