ECS1601
LATEST EXAM PACK 2022
NOTES
ASSIGNMENT FOR 2022
1,2,3 AND 4
, 2021
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,ECS1601
ASSIGNMENT 1
FOR 2022
, 1. 2 Reference: Prescribed book PG 4
Economics is concerned with scarcity. The basic fact of economic life is that there are simply
not enough goods and services to satisfy everyone’s wants. Wants are unlimited but the means
with which the wants can be satisfied are limited. All individuals and societies are confronted by
the problem of unlimited wants and limited means. They therefore have to make choices.
2. 1 Reference: Prescribed book PG 12
Macroeconomics is concerned with the eco nomy as a whole. The prefix “macro” comes from
the Greek
word makros meaning large. In macroeconomics we focus on the “big picture.” We develop an overall
view of theeconomic system and we study total or aggregate economic behaviour. The emphasis is
on topics such as total production, income and expenditure, economic growth, aggregate
unemployment, the general price level, inflation and the balance of payments. Macroeconomics is
therefore the world of totals.
3. 2
4. 4 Reference: Prescribed book PG 90
The disadvantage is that it will lead to lower supply. If firms get a lower price, there may be less
incentive to supply the good, and the number of properties on the market declines. A maximum
price will also lead to a shortage – where demand will exceed supply; this leads to waiting lists
5. 3 Reference: Prescribed book PG 42
The factors of production are resources that are the building blocks of the economy; they are
what people use to produce goods and services. Economists divide the factors of production into
four categories: land, labor, capital, and entrepreneurship.
6. 2 Reference: Prescribed book PG 45
Broadly speaking there are four types of income, each associated with a different factor of
production. The remuneration of natural resources (or land) is called rent. Wages and salaries are the
remuneration of labour, while the remuneration of capital is called interest. Finally, profit is the
remuneration of entrepreneurship.
The total income in the economy thus consists of rent, wages and salaries, interest and profit and
the value of total income is identically equal to the value of total production.
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