PROGRAMME: BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT

MODULE: ECONOMICS 1
Total Marks: 50

QUESTION ONE [30]

1.1 Discuss price floors as a form of government intervention in a free market. Use
examples to motivate your answer. (8)

1.2 Question 1.2 is based on the diagram below representing the free market for a good.

How does this free market adjust if it is in the shaded green area. (5)

1.3 Demonstrate that a complete outward shift of the production possibility frontier for an
economy implies economic growth in the production of both the goods for that economy.
Use the ONE most relevant diagram below to motivate your answer. (8)
 DIAGRAM A DIAGRAM B

1.4 Distinguish between the economic terms scarcity and opportunity cost. (9)

Total word Q1: 500 – 550 Words

QUESTION TWO [20]

Question 2.1 is based on the diagram below relating to elasticity and demand curves.

2.1 Between LD1 and LD2, discuss which demand curves are elastic and inelastic. Provide
a motivation for your answer. (12)

2.2 Explain cross price elasticity of demand and how it can be used to define goods and
services. (8)

Total word Q2: 200 – 300 Words

Guidelines
1. There are 2 questions in this assignment.
2. Make sure that you have carefully read and fully understood the questions before
answering them. Answer the questions fully but concisely and as directly as possible.
Follow all specific instructions for individual questions (e.g. “list”, “in point form”).
3. Answer all questions in your own words. Do not copy any text from the notes, readings, or
other sources. The assignment must be your own work only.
4. Follow the word count at the end of each question.

Mark allocation
Each question receives a mark allocation. The mark allocation is there to show you the
weighting and length of each question. The total final mark will be used towards your
assessment calculation. Marks allocated to the 2 questions is as follows:
Question 1 30
Question 2 20
TOTAL 50