Determine the function at
( )
f q
if
2
1
1
( )
5
f x
qx
x
q
[3]
2.2
Ndeyapo has a budget of N$6500 to spend on two utilities (U
1
, U
2
) whose respective
unit prices
are N$250 and N$130 respectively.
2.2.1
Formulate an Isocost function that describes the different combinations of the two different utilities.
[3]
2.2.2
Draw an Isocost line
(?
1
)
, with U
1
on the horizontal axis, to show all the different
combinations of the two utilities that can be bought within Ndeyapo’s budget.
[4]
2.2.3
What happens to the original isocost line if the budget falls by 30%?
[1]
2.2.4
On the same graph, draw the isocost line
(?
2
)
with this new budget (state new isocost function).
Comment on your observation about the slope and vertical intercept.
[4]
2.2.5
What happens to the original budget line if the price of utility U
1
tripled and the price of U
2
decreased by a fifth of the price? Graph this new budget line
(?
3
)
on the same graph.
Comment on your observations.
[4]
2.3
The
Income
Determination
model
for
a
4-sector
economy,
𝑌 = 𝐶 + 𝐼 + 𝐺 + ?
,
in
equilibrium has the following functions:
0
1
0
0
0
(
)
C
C
C Y
T
consumption
I
I
br
investment
G
G
government spending
T
T
taxes