CHAPTER 1 QUESTIONS WITH
CORRECT ANSWERS!!
'Malawi ought to undertake policies to make its healthcare sector accessible to the
majority of the population'. - ANSWERnormative
A key driver of the market system lies in the fact that participants act__. -
ANSWERin their own self-interest
A major argument for the market system, which does not necessarily have to do with
economics, is the system's emphasis on __. - ANSWERpersonal freedom
A market system allows for the private ownership of _____ , communicates through
_____, and coordinates economic activity through _____. - ANSWERcapital, prices,
markets
A positive statement is different from a(n) _____ statement in that it appeals solely to
empirical facts. - ANSWERnormative
According to Adam Smith, a curious unity between private interests and social
interests would be established when firms and resource suppliers act out of __. -
ANSWERself-interest
After completing her matric with six distinctions, Mala must choose what she will do
next year. Her parents are eager for her to study chemical engineering. Mala,
however, thinks that it would be best to take a year off in order to gain some practical
experience and figure out what she really enjoys. A third option is for her to study
economics, which she hears about often in the news, though she is not quite sure it
would suit her personality. Mala also has an uncle who is a veterinarian, and has
suggested that she train to be a veterinary nurse with him next year. Mala is a bit
scared of dogs and isn't sure that she would want to do that. - ANSWERThe forfeit
opportunity to take a year off.
Consumer sovereignty refers to __. - ANSWERthe fact that consumers determine
the types and quantities of goods and services that will be produced with the scarce
resources in the economy
Consumers' ability to pay the market price for goods and services will depend on the
consumers' __. - ANSWERincome, preferences and the price of the goods
Countries such as the BRICs (Brazil, Russia, India and China) are well-known
examples of _____ markets. - ANSWERemerging
, An aggregate is a collection of __. - ANSWERspecific economic units treated as if
they were one unit
As a consumer, your ability to buy goods and services that best suit your
preferences and budget is thanks to __. - ANSWERfreedom of choice
Command systems such as those in the Soviet Union and China faced an incentive
problem because__. - ANSWERthese systems did not allow for entrepreneurship, so
there was never a reward for innovation, output mixes were centrally determined, so
production managers never faced penalties for shortages
Complete the following definition of an economic system. - ANSWERinstitutional,
coordinating, scarcity, market, command
Consider two participants in an economy. Sharon lives as a tenant on a smallholding
in the North-West province. She has no proper rental agreement with her landlord
and is not sure whether her landlord will allow her to remain on the property for
another year. Jabulani has spent the past decade working very hard to save enough
money, with which she has just bought a house in a nature estate in Gauteng. -
ANSWERJabulani
Creative destruction refers to the hypothesis that the creation of new products and
production methods simultaneously _____ the market power of existing _____. -
ANSWERdestroys, monopolies
David has made R100 000 with his small business, and wishes to invest the full sum
so that his money can grow. After reading up a bit more about his options, he has
identified two alternatives which seem most suited to his needs. - ANSWERHe
forfeits the 5% interest he could have earned
Despite certain limitations, in which of the following ways are economic principles
and models highly useful? - ANSWERDetermining cause and effect within an
economic system, Understanding how the economy operates, Analysing economic
behaviour, Explaining and predicting
Economics is the study of how _____, _____ and _____ make choices, to optimize
their level of satisfaction under conditions of _____. - ANSWERindividuals,
businesses, institutions, scarcity
Economists develop theories of __ concerning individuals (consumers, workers) and
institutions (businesses, governments) engaged in the production, exchange and
consumption of goods and services. - ANSWERbehaviour
Emerging market countries typically display which of the following characteristics? -
ANSWEREvident economic growth rates, Volatile domestic markets, Dependence
on global markets
Emerging markets refer to economies that consist of a combination of the
characteristics of the _____ market form yet still depend highly on _____ intervention
to set the playing field in terms of _____ development specifically. -
ANSWERlaissez-faire, government, infrastructure
CORRECT ANSWERS!!
'Malawi ought to undertake policies to make its healthcare sector accessible to the
majority of the population'. - ANSWERnormative
A key driver of the market system lies in the fact that participants act__. -
ANSWERin their own self-interest
A major argument for the market system, which does not necessarily have to do with
economics, is the system's emphasis on __. - ANSWERpersonal freedom
A market system allows for the private ownership of _____ , communicates through
_____, and coordinates economic activity through _____. - ANSWERcapital, prices,
markets
A positive statement is different from a(n) _____ statement in that it appeals solely to
empirical facts. - ANSWERnormative
According to Adam Smith, a curious unity between private interests and social
interests would be established when firms and resource suppliers act out of __. -
ANSWERself-interest
After completing her matric with six distinctions, Mala must choose what she will do
next year. Her parents are eager for her to study chemical engineering. Mala,
however, thinks that it would be best to take a year off in order to gain some practical
experience and figure out what she really enjoys. A third option is for her to study
economics, which she hears about often in the news, though she is not quite sure it
would suit her personality. Mala also has an uncle who is a veterinarian, and has
suggested that she train to be a veterinary nurse with him next year. Mala is a bit
scared of dogs and isn't sure that she would want to do that. - ANSWERThe forfeit
opportunity to take a year off.
Consumer sovereignty refers to __. - ANSWERthe fact that consumers determine
the types and quantities of goods and services that will be produced with the scarce
resources in the economy
Consumers' ability to pay the market price for goods and services will depend on the
consumers' __. - ANSWERincome, preferences and the price of the goods
Countries such as the BRICs (Brazil, Russia, India and China) are well-known
examples of _____ markets. - ANSWERemerging
, An aggregate is a collection of __. - ANSWERspecific economic units treated as if
they were one unit
As a consumer, your ability to buy goods and services that best suit your
preferences and budget is thanks to __. - ANSWERfreedom of choice
Command systems such as those in the Soviet Union and China faced an incentive
problem because__. - ANSWERthese systems did not allow for entrepreneurship, so
there was never a reward for innovation, output mixes were centrally determined, so
production managers never faced penalties for shortages
Complete the following definition of an economic system. - ANSWERinstitutional,
coordinating, scarcity, market, command
Consider two participants in an economy. Sharon lives as a tenant on a smallholding
in the North-West province. She has no proper rental agreement with her landlord
and is not sure whether her landlord will allow her to remain on the property for
another year. Jabulani has spent the past decade working very hard to save enough
money, with which she has just bought a house in a nature estate in Gauteng. -
ANSWERJabulani
Creative destruction refers to the hypothesis that the creation of new products and
production methods simultaneously _____ the market power of existing _____. -
ANSWERdestroys, monopolies
David has made R100 000 with his small business, and wishes to invest the full sum
so that his money can grow. After reading up a bit more about his options, he has
identified two alternatives which seem most suited to his needs. - ANSWERHe
forfeits the 5% interest he could have earned
Despite certain limitations, in which of the following ways are economic principles
and models highly useful? - ANSWERDetermining cause and effect within an
economic system, Understanding how the economy operates, Analysing economic
behaviour, Explaining and predicting
Economics is the study of how _____, _____ and _____ make choices, to optimize
their level of satisfaction under conditions of _____. - ANSWERindividuals,
businesses, institutions, scarcity
Economists develop theories of __ concerning individuals (consumers, workers) and
institutions (businesses, governments) engaged in the production, exchange and
consumption of goods and services. - ANSWERbehaviour
Emerging market countries typically display which of the following characteristics? -
ANSWEREvident economic growth rates, Volatile domestic markets, Dependence
on global markets
Emerging markets refer to economies that consist of a combination of the
characteristics of the _____ market form yet still depend highly on _____ intervention
to set the playing field in terms of _____ development specifically. -
ANSWERlaissez-faire, government, infrastructure
