Maldives is a deserted island economy with a total of four people

QUESTION 1 (5 marks)
a) When most people want to know the cost of an item or a service, they look for a price tag. What
would an economist say the price is? Explain below:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
b) What is the difference between a change in demand and a change in quantity demanded? Explain
below:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 17
QUESTION 2 (20 marks)
Maldives is a deserted island economy with a total of four people: Anna, Chris, Sandra and Joe.
The inhabitants are only able to produce two goods in their economy – fish and seaweed.
Both goods are obtained from open water diving and require the use of a scuba tank. Luckily, they found
four of these tanks, one for each of them, that were left behind by previous visitors to the island.
Moreover, they were fortunate to find that each tank comes with a gadget that allows them to fill the tanks
with oxygen by manually pumping air into the tank. This takes quite a bit of time, and they find it best to
fill these at night before they go to sleep. The gadgets are also not equally efficient at filling the tanks and
they are not interchangeable – each can only be used with the specific tank it was found with. As such, in
the morning the maximum level of oxygen in each person’s tank differs. Thus, each person possesses a
different amount of oxygen in their tanks.
The following table shows the level of oxygen in each person’s tank in the morning and how much is
needed for each to catch each unit of food:

a) If all four decide to catch only fish, how many can they all catch? If all four decide to collect only
seaweed, how many can they all catch? Put your answers in the following table