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Economics 1500 - ECS1500 Assignment Answers
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Economics 1500 - ECS1500 Assignment Answers
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The problem of “what to produce” in South Africa is solved by …Select one or more:
a.
tradition
b.
consumer preferences
c.
the South African Reserve Bank (SARB).
d.
government decisions
Feedback
South Africa is a mixed economy which implies that the economic problem (the question
of what, how and for whom to produce) is solved by both the market (consumer
preferences) and by decisions by the government.
The correct answers are: government decisions, consumer preferences
Question 2
Correct
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Question text
Households are responsible for the spending on consumer goods.
Select one:
True
False
Feedback
Households are the economic units that take decisions on what to consume in the
economy, while business enterprises supply the goods and services that are available for
consumption. It is, of course true, that government may also purchase goods and
services. However, we call this government spending and not consumption. You will
learn about this in learning unit 8.
The correct answer is 'True'.
Question 3
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The person or company that combines the factors of production forms part of the
production factor labour.
Select one:
True
False
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That is correct. Well done! You can distinguish between entrepreneurship and labour.
The person or company that combines the factors of production is called the
entrepreneur, and this effort is distinguished from the effort of the production factor
labour. The entrepreneur is very important in the production process, as no production
will take place if the entrepreneur does not take the initiative to combine the other
production factors.
The correct answer is 'False'.
Question 4
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Which of the following statements is true about the simple economic model?
[1] Consumers are both sellers and buyers.
[2] In the real market, only goods are traded.
[3] In the simple circular flow of economic activity, “real” flows of goods and factors, and
financial flows, move in opposite directions.
[4] It is not possible to increase the total income without increasing production.
Select one:
a.
Only statements [1], [2] and [3] are correct.
, b.
Only statement [4] is correct.
c.
Only statement [2] is correct.
d.
Only statements [1] and [4] are correct.
Feedback
Correct.
In the simple economic model, consumers are sellers of factors of production (land,
labour, entrepreneurship and capital). With the income earned from the sale of factors of
production, they are also buyers of goods and services. Therefore option [1] is true.
The real market is a market that trades tangible goods (as opposed to financial markets).
There are two types of real markets, namely the resource market (a market that trades
factors of production) and the goods market (a market that trades goods and services).
Option [2] is incorrect.
When the household buys goods and services from the business enterprises, the goods
and services will flow from the business enterprises to the households, while the
payment for these goods and services (the financial flow) will be from the households to
the business enterprises. Similarly, when factors of production are employed by the
business enterprises, the factor of production will flow from the households to the
business enterprises, while the payment for these factors of production (the financial
flow) will be from the business enterprises to the households. Option [3] is correct.
Income in the simple economic model is the payment for delivery of factors of
production. Thus, the only way to increase income in the model, is to increase
production. Option [4] is correct.
The correct answer is: Only statements [1], [2] and [3] are correct.
Question 5
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Question text
Scarcity means that ….
Select one:
a.
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