Download GENERAL Students find this study unit and the next one extremely

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GENERAL
Students find this study unit and the next one extremely difficult. Most students struggle to
construct graphs, and that's why I refer you firstly to chapter 6 in the prescribed textbook,
section 6.5. Secondly, I refer you to the frequently asked questions (FAQs) on myUnisa under
the ECS1501 orange bar, “how to approach graphs”. You may also visit the following Internet
site for further assistance with graphs:
http://www.econweb.com/Sample/IntroTopics/EconGraphing/Graphs1.html
Students also struggle in the examination to differentiate between a shift of the demand or
supply curve on one hand and a movement along the demand or supply curve on the other.
Apart from that, they label the demand and supply curves and the axes incorrectly when
constructing a graph. When they are given a table, they are unable to calculate the excess
demand or supply based on the given data. Lastly, students often indicate the area representing
excess demand and supply incorrectly on a graph.
The only way to master graphs, is to practice them on a piece of paper and to draw them on the
white board during discussion and tutorial classes. You will make mistakes, and at this stage it
is acceptable to make mistakes. But if you have a problem, please take the opportunity and get
assistance from your peers, tutors and lecturers in this regard. I also suggest that you look at
the ECS1501 CD Granules, especially the section dealing with demand and supply. We also
advise you to watch the relevant section on the DVD. In the examination you will be required to
do two things concerning graphs. You must be able to:

construct the graphs on a piece of rough paper to choose the correct option as an answer to
some of the questions

interpret and analyse graphs to extract information that will help you to choose the correct
option
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FORMAT OF ASSESSMENT
In the examination, your knowledge of this study unit will be assessed by means of multiplechoice questions. We will ask questions on the slope of curves, movements along curves versus
shifts of curves, and on the relationship between variables. We will also include graphs in the
examination paper and ask questions on them. The information given in tables 7-3 and 7-5 in
the prescribed textbook will assist you greatly in differentiating between a shift of and a
movement along a curve. Furthermore, these two tables provide you with information on the
direction of the shift of either a demand or a supply curve. The interpretation of figure 7-11 is
equally important. We have included thirteen multiple-choice questions from this study unit. In
total, this study unit represents 14% of the examination paper.
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IMPORTANT AREAS IN THE STUDY UNIT
Pay attention to the following:
o Individual demand versus market demand.
o A movement along the demand curve versus a shift of the demand curve (table 7-3 in
the textbook is extremely important).
o The law of demand and the direction of change between price and quantity variables.
o Individual versus market supply.
o The law of supply and the direction of change between price and quantity variables.
o A movement along the supply curve versus a shift of the supply curve. (Table 7-5 in the
textbook is extremely important.)
o An increase and decrease in the supply of a product when you illustrate a shift of the
supply graph. Should you, in the examination, indicate a leftward shift in the supply curve
as an increase in supply, it would be incorrect.
o Market equilibrium. Table 7-6 in the textbook is important, because you must be able to
use the information in the table to calculate excess demand or supply (values in column
4 of table 7-6).
o Figure 7.11 is rather important and you must be able to:

determine the equilibrium price and quantity from the graph
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calculate the excess demand and supply on the graph when a graph with price and
quantity values is provided
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calculate total expenditure at certain points when a graph with price and quantity
values is provided
o Also pay attention to the equilibrium condition at the point of equilibrium, namely that at
equilibrium (point E in figure 7.11), the quantity demanded is equal to the quantity
supplied.
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ACTIVITIES TO DO
You must do the following exercises:

In your study guide:
 Activity 4.1: questions (d) – (k)
 Activity 4.1: true/false questions
 Activity 4.2: questions (e) – (h)
 Activity 4.2: true/false questions
 Activity 4.3: questions (a) – (c)
 Activity 4.4: all the questions

Section A, question 1 of the October 2009 examination paper, which is available on
myUnisa.
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Questions 1 and 2 in the self-assessment assignment at the back of your study guide.