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
Welcome back rudzanimajie24 — been a while! Let's pick up where you left off. 2.1.1 A tariff in this context refers to the rate or price charged per unit of electricity (kWh) by the municipality. It is the cost structure for the electricity service. 2.1.2 a) Step 1: Identify the initial meter reading and the amount of electricity purchased. The initial meter reading before purchase was 5.3 kWh. Lebogang purchased electricity worth R398.00. Step 2: Calculate the remaining units in the first tariff block (0-100 kWh) and their cost. The first tariff block is for 0-100 kWh at R2.775755 per unit. Units remaining in the first block = 100 kWh - 5.3 kWh = 94.7 kWh. Cost of these units = 94.7 kWh × R2.775755/kWh = R262.7709985. Step 3: Calculate the remaining money after purchasing units in the first block. Money remaining = R398.00 - R262.7709985 = R135.2290015. Step 4: Calculate the units purchased in the second tariff block (101-400 kWh). The second tariff block is for 101-400 kWh at R3.248405 per unit. Units purchased in the second block = R135.2290015R3.248405/kWh ≈ 41.6300 kWh. Step 5: Calculate the total units of electricity purchased. Total units purchased = 94.7 kWh + 41.6300 kWh = 136.3300 kWh. Step 6: Calculate the new meter reading after the purchase. New meter reading = Initial meter reading + Total units purchased New meter reading = 5.3 kWh + 136.3300 kWh = 141.6300 kWh. Step 7: Round the new meter reading to the nearest whole number and compare. Rounded new meter reading = 142 kWh. The meter reading after purchase shown in Table 3 is 142.4 kWh. When rounded to the nearest whole number, 142.4 kWh becomes 142 kWh. Therefore, the meter reading after purchase is correct when rounded to the nearest whole number. b) Step 1: Identify the VAT rate. The tariffs are VAT inclusive. Assuming the standard South African VAT rate of 15\%. Step 2: Calculate the VAT amount on the electricity purchase. The total purchase amount of R398.00 includes VAT. VAT amount = VAT rate1 + VAT rate × Total amount VAT amount = (0.15)/(1 + 0.15) × R398.00 VAT amount = (0.15)/(1.15) × R398.00 VAT amount = R51.91304... Step 3: Round the VAT amount to two decimal places. The VAT amount on her electricity purchase is R51.91. Send me the next one 📸