This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
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QUESTION 1.3 1.3.1 Step 1: Use the given exchange rate to convert R14 800 to USD. Given: 1 = R16.53 Amount in USD = Amount in ZARExchange rate Amount in USD = (R14\,800)/(R16.53/USD) = 895.34 USD R14 800 is equivalent to 895.34 USD. 1.3.2 Step 1: Use the new exchange rate to determine the price of the laptop in South African rand. Given: Laptop price = 820 New exchange rate: 1 = R19.80 Price in ZAR = Amount in USD × Exchange rate Price in ZAR = 820 × R19.80 = R16\,236.00 The price of the laptop in South African rand is R16 236.00. 1.3.3 A weak rand means that South African consumers need to spend more rand to buy the same amount of foreign currency. This makes imported goods, which are priced in foreign currency, more expensive when converted to rand, thus reducing the purchasing power of South African consumers. QUESTION 2 2.1 A tariff is a charge or a list of charges for a service, especially one imposed by a government on imported or exported goods, or by a company for a particular service like telecommunications. 2.2 An advantage of Option A (Contract) is that it offers a fixed monthly fee which includes a set number of call minutes (300 minutes). This provides predictability in monthly spending and can be more cost-effective for users who consistently use a moderate to high number of minutes within the included allowance. 2.3 Step 1: Calculate the total monthly cost for Option B for 250 minutes. Option B (Pay-As-You-Go) has no monthly fee, and the call cost is R2.30 per minute. Cost for Option B = 250 minutes × R2.30/minute = R575.00 Step 2: Calculate the total monthly cost for Option A for 250 minutes. Option A (Contract) has a fixed monthly fee of R220 and includes 300 minutes. Since 250 minutes is less than 300 minutes, there are no extra call costs. Cost for Option A = R220.00 Step 3: Compare the costs and identify the cheaper option. Cost for Option A = R220.00 Cost for Option B = R575.00 Option A is cheaper. The total monthly cost for option B is R575.00, and Option A$ is cheaper for using 250 minutes. 2.4 Choosing the wrong tariff can significantly affect Lelo's monthly budget by leading to unnecessary expenses. If Lelo chooses a contract with a high fixed fee (like Option A) but uses very few minutes, they would be paying for minutes they don't use. Conversely, if Lelo chooses a pay-as-you-go option (like Option B) but makes many calls, the per-minute cost can quickly accumulate to a much higher total than a contract with included minutes, thus straining their budget. That's 2 down. 3 left today — send the next one.