ECS1501 ASSIGNMENT 1 SEMESTER 2

1.1Economics is _______ [1] a study of the ethics of making money. [2] the study of how scarce resources are allocated in an attempt to satisfy unlimited wants. [3] the study of direct and indirect relationships between inputs and outputs in various production methods. [4] a sub discipline of business management. Economics cannot be defined as the study of money. It is concerned with the economic choices and decisions made by businesses, government and individuals. Economics is the study of how scarce resources are allocated to satisfy wants. Because businesses, individuals and government have unlimited wants, whereas resources are limited, we have to make choices on how to use the scarce resources to satisfy unlimited wants. Economics is the study of the use of scarce resources to satisfy unlimited human wants. Richard Lipsey PAGE 3 PRESCRIBED TEXTBOOK 1.2 Scarcity requires households to [1] cooperate. [2] compete. [3] trade. [4] make choices. The fact that we live in a world of scarcity forces us to make difficult choices. PAGE 4 PRESCRIBED TEXTBOOK 1.3 Point ____ shows an efficient use of resources, while point ____ is unattainable. [1] A; B [2] B; C [3] C; D [4] D; E 1.4 Namia is currently producing eight ships but decides to increase the production of ships to 12. What is the opportunity cost of the decision? [1] 3 000 swords [2] 4 000 swords [3] 6 000 swords [4] 10 000 swords 1.5 What will most likely happen when there is an influx of workers into Namia? [1] Point E will become unattainable. [2] Point B will become attainable. [3] Namia will not be able to produce 12 ships anymore. [4] Namia will not be able to produce 10 000 swords anymore. 1.6 Which one of the following must be held constant when drawing a production possibilities curve? [1] the total resources available [2] the allocation of resources between alternative uses [3] the buying power of consumers [4] the unemployment rate