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
Here are the solutions to the questions: 4.1 Step 1: Identify the property area. The property area is 175 m^2. Step 2: Find the corresponding tariff band in the Johannesburg table. For Johannesburg, properties "Up to and including 300 m^2" have a sanitation cost. Step 3: Read the cost from the table. The cost is R228,06. Step 4: Round the cost to the nearest ten cents. R228,06 ≈ R228,10 The cost for sanitation in Johannesburg for a 175 m^2 property is R228,10. 4.2 Step 1: Identify the usage and the relevant tariff band in Cape Town. The usage is 4,1 k. This falls into the "0-4,2 kℓ" band. Step 2: Identify the current tariff and the increase from previous. The current tariff for this band is R16,03 per kℓ. The increase from previous is R0,66 per kℓ. Step 3: Calculate the tariff before the increase. Tariff before increase = Current Tariff - Increase Tariff before increase = R16,03/k - R0,66/k = R15,37/k Step 4: Calculate the total cost for 4,1 k sanitation before the increase. Cost = Usage × Tariff before increase Cost = 4,1 k × R15,37/k = R63,017 Step 5: Round the cost to two decimal places. Cost ≈ R63,02 The cost for 4,1 k sanitation in Cape Town before the increase is R63,02. 4.3 Step 1: Calculate Mr. Jones's sanitation cost (Johannesburg). Mr. Jones's property area is 550 m^2. According to the Johannesburg table, this falls into the "Larger than 300 m^2 to 1\,000 m^2" category. The cost is fixed based on property area. Mr. Jones's cost = R443,96 Step 2: Calculate Ms. Brown's sanitation cost (Cape Town). Ms. Brown's sanitation usage is 22 k. Cape Town uses a stepped tariff system based on usage. • For the first 4,2 k (0-4,2 kℓ band) at R16,03 per kℓ: 4,2 k × R16,03/k = R67,326 • For the next 3,15 k (from 4,2 kℓ to 7,35 kℓ) at R22,02 per kℓ: (7,35 - 4,2) k × R22,02/k = 3,15 k × R22,02/k = R69,363 • For the remaining 14,65 k (from 7,35 kℓ to 22 kℓ) at R30,92 per kℓ: (22 - 7,35) k × R30,92/k = 14,65 k × R30,92/k = R453,008 Step 3: Sum Ms. Brown's costs for each band. Ms. Brown's total cost = R67,326 + R69,363 + R453,008 = R589,697 Rounded to two decimal places: R589,70. Step 4: Determine the difference in cost. Difference = Ms. Brown's cost - Mr. Jones's cost Difference = R589,70 - R443,96 = R145,74 The difference in the cost of sanitation for the two properties is R145,74. 4.4 The tariff system used in Johannesburg is based on the area of the property, not the actual water usage. This is beneficial to homeowners because their sanitation bill remains a fixed cost regardless of how much water they use. This means that increased water consumption does not lead