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.
ScanSolve AI Answer
Step 1: Calculate the cost of 2569 kWh of electricity excluding VAT. The electricity is charged on a sliding scale: • 0 - 500 kWh: 500 kWh × 105.75 c/kWh = 52875 cents • >500 - 1000 kWh: 500 kWh × 129.82 c/kWh = 64910 cents • >1000 - 2000 kWh: 1000 kWh × 130.75 c/kWh = 130750 cents • >2000 - 3000 kWh: (2569 - 2000) kWh × 132.09 c/kWh = 569 kWh × 132.09 c/kWh = 75160.21 cents Total cost excluding VAT: 52875 + 64910 + 130750 + 75160.21 = 323695.21 cents Convert to Rands: 323695.21 cents ÷ 100 = R3236.9521 Step 2: Calculate the cost including VAT. Assuming a standard VAT rate of 15\%: VAT amount: R3236.9521 × 0.15 = R485.542815 Total cost including VAT: R3236.9521 + R485.542815 = R3722.494915 Rounding to two decimal places: R3722.49 The cost of her purchase including VAT is R3722.49. Step 1: Suggest two ways Mrs Smith can reduce her electricity cost. • Use energy-efficient appliances (e.g., LED lighting, A-rated appliances). • Switch off lights and appliances when not in use. Step 1: Identify the original tariff for units between 2001 and 3000 kWh. The original tariff is 132.09 c/kWh. Step 2: Calculate the new tariff after a 15.5\% increase. New tariff = Original tariff × (1 + percentage increase) 132.09 c/kWh × (1 + 0.155) 132.09 c/kWh × 1.155 152.56395 c/kWh Rounding to two decimal places: 152.56 c/kWh The new tariff per unit for units between 2001 and 3000 kWh is 152.56 c/kWh. Step 1: Calculate the cost of 1031.03 kWh of electricity excluding VAT. • 0 - 500 kWh: 500 kWh × 105.75 c/kWh = 52875 cents • >500 - 1000 kWh: 500 kWh × 129.82 c/kWh = 64910 cents • >1000 - 2000 kWh: (1031.03 - 1000) kWh × 130.75 c/kWh = 31.03 kWh × 130.75 c/kWh = 4059.4325 cents Total cost excluding VAT: 52875 + 64910 + 4059.4325 = 121844.4325 cents Convert to Rands: 121844.4325 cents ÷ 100 = R1218.444325 Step 2: Calculate the cost including VAT. Assuming a standard VAT rate of 15\%: VAT amount: R1218.444325 × 0.15 = R182.76664875 Total cost including VAT: R1218.444325 + R182.76664875 = R1401.21097375 Rounding to two decimal places: R1401.21 Step 3: Verify Mrs Smith's claim. Mrs Smith claimed she paid R1389. Our calculation shows the cost is R1401.21. Since R1401.21 ≠ R1389, her claim is not valid. What's next? Send 'em! 📸