Faculty: Commerce and Law
Module Code: COECA1
Module Name: Economics 1A
Content Writer: Manelisi Sambo
Internal Moderation: Munyaradzi Ziso
Copy Editor: Ingrid Viljoen
Total Marks: 100
Submission Week: Week 6
This module is presented on NQF level 5.
5% will be deducted from the student’s assignment mark for each calendar day the assignment is
submitted late, up to a maximum of three calendar days. The penalty will be based on the official
campus submission date.
Assignments submitted later than three calendar days after the deadline or not submitted will get
0%.
This is a group assignment. Groups should consist out of 3 - 5 members.
This assignment contributes 20% towards the final mark.
1. Instructions to Students
1. Please ensure that your answer file (where applicable) is named as follows before
submission: Module Code – Assessment Type – Campus Name – Student Number.
2. Remember to keep a copy of all submitted assignments.
3. All work must be typed.
4. Please note that you will be evaluated on your writing skills in all your assignments.
5. All work must be submitted through Turnitin. The full originality report will be automatically
generated and available for the lecturer to assess. Negative marking will be applied if you are
found guilty of plagiarism, poor writing skills, or if you have applied incorrect or insufficient
referencing. (See the “Assignment/Project Instructions” book activity before this activity
where the application of negative marking is explained.)
6. You are not allowed to offer your work for sale or to purchase the work of other students.
This includes the use of professional assignment writers and websites, such as Essay Box. You
are also not allowed to make use of artificial intelligence tools, such as ChatGPT, to create
content and submit it as your own work. If this should happen, Eduvos reserves the right not
to accept future submissions from you.
7. One group member should be nominated to submit the assessment on behalf of the group.
Multiple submissions by various group members will result in an inflated similarity index on
Turnitin.
2. Section A
Section A
Learning Objective
This assignment tests the theoretical and practical aspects of the module and your ability to
use the Harvard Referencing method.
Scope
LOs 1, 3 and 4
Marking Criteria
Plagiarism is a very serious matter and if any part of your assignment is found to
be plagiarised you risk a zero grade.
2. Section A
2.1. Question 1
Question 1 25 Marks
Define the Production Possibilities Frontier (PPF) and explain how it relates to opportunity
cost, use a graph and example to support your answer. What are the factors that can
shift the PPF and how do these shifts affect the overall economy? Additionally, how do you
define an efficient allocation of resources within the context of the PPF?
(25 Marks)
2. Section A
2.2. Question 2
Question 2 25 Marks
Study the scenario and complete the question that follows:
Different economic systems
A system is a network of parts that interlock to form an overall pattern. Examples include the
nervous system of the human body, the solar system, the transport system of a country, and
its political system. An economic system is a pattern of organisation which is aimed at
solving the three central economic questions. Economic systems do not always work well,
but they are often so vast and complicated that it is quite marvellous that they work at all.
Adapted from: Mohr, P. 2015. Economics for South African students. 5th edition. Pretoria:
Van Schaik.
Write a report about the four main types of economic systems: the traditional system, the
command system, the market system, and the mixed economic system.
The following guidelines should be adhered to when writing your report:
The report should consist of between 1 500 and 2 000 words.
A word count should be provided at the end of the report.
The report should have both an introduction and a conclusion.
All four of the economic systems should be discussed with respect to their
functioning, origin, and future.
Current real-life examples should be provided for all four economic systems.
Make use of headings and sub-headings to ensure a logical discussion.
Suitable economics subject terminology (language) should be used.
All facts that are not common knowledge should be referenced using the Harvard
method (in-text references used in the report should be included in the bibliography
of this assignment).
2. Section A
2.3. Question 3
Question 3 25 Marks
Study the scenario and complete the questions that follow:
XYZ TECH DECIDES TO DISCONTINUE FLAGSHIP SMARTPHONES
After years of popularity, tech enthusiasts were dismayed to learn that XYZ Tech has decided
to discontinue flagship smartphone model, the XYZ Pro. The company cited declining demand and a
significant decrease in sales as the primary reasons for this decision. Fans of the XYZ Pro took to
online forums to express their disappointment and reminisce about their favorite features of the
beloved device. In response to the discontinuation of the XYZ Pro smartphone, users on online
forums and communities started discussing a potential substitute for the product. One popular
substitute is the OLX elite smartphone which shares similar features and functionalities with the XYZ
Pro.
Source: Sambo (M,2024).
3.1. How does a recent decrease in the price of OLX elite smartphones, a substitute for the XYZ
Pro smartphones, impact the equilibrium price and quantity in the market for flagship smartphones?
Graphically illustrate and explain. (10) Marks)
3.2 Using demand and supply analysis, illustrate (draw a fully labelled graph) and explain the
impact of a decrease in the supply resulting from a global shortage of batteries (battery is a key
component/input of flagship smartphones) on the equilibrium price and quantity in the market
for. Flagship smartphones (10 Marks)
3.3. Explain the impact of a decrease in consumer income on the equilibrium price and quantity in
the market for flagship smartphones, using demand and supply analysis. Provide a graphical
illustration to support your explanation. (5 Marks)
(25 Marks)
2. Section A
2.4. Question 4
Question 4 25 Marks
Study the scenario and complete the questions that follow:
The Fizzy Fanatic
David is a devoted fan of Coca-Cola, particularly the 2-liter bottles. He has a keen interest in tracking
how his purchasing decisions are influenced by changes in price and his income level. Below are
tables illustrating the number of 2-liter bottles David will buy based on varying prices and income
levels.
Table 1: Number of Fizzy Drinks vs Price
2L Bottle price Number of 2L Bottles bought.
R15 20
R20 11
Table 2: Number of Fizzy Drinks Bought vs. Income Level.
Income Level Number of 2L Bottles bought.
R 10 000 20
R 12 000 28
David is an avid fan of live performances and often travels out of town to attend concerts, theatre
shows, and sporting events. He enjoys the thrill of experiencing live entertainment and is interested
in understanding how changes in the price of fuel affect his travel behaviour.
Table 3 indicates David’s price and income elasticities coefficients for demand for fuel over both the
long – and short-run.
Table 3: Price and Income Elasticity coefficients of fuel
Price elasticity Income elasticity
Short run 0.66 0.33
Long run 0.75 1.50
Source: Haasbroek, J. (2023)
4.1 Use Table 1 to calculate and interpret David’s price elasticity of demand for Coca-Cola as the
price increases from R15 to R20. Show all formulas and calculations.
4.2 Use Table 2 to calculate and interpret David’s income elasticity of demand for Coke as his income
increases from R10 000 to R12 000 if the price of a 2l Bottle is set at R15. Show all formulas and
calculations.
4.3 Do you expect the cross elasticity of demand between Coca-Cola0 and a Hamburger to be
positive or negative? Substantiate your answer by using elasticity concepts. (25 Marks)
4.4 Analyse the elasticity coefficients provided in Table 3.