01 5/3/09 2:26 pm Page i
Economics
for South African students
FOURTH EDITION
Philip Mohr, Louis Fourie
and associates
Van Schaik
PUBLISHERS
,01 5/3/09 2:26 pm Page ii
Published by Van Schaik Publishers
1064 Arcadia Street, Hatfield, Pretoria
All rights reserved
Copyright © 2008 P. Mohr
No part of this book may be reproduced or transmitted in any form
or by any electronic or mechanical means, including photocopying
and recording, or by any information storage and retrieval system,
without written permission from the publisher.
First edition 1995 Fourth impression 2003
Second impression 1996 Third edition 2004
Third impression 1997 Second impression 2004
Fourth impression 1998 Third impression 2004
Fifth impression 1998 Fourth impression 2005
Sixth impression 1999 Fifth impression 2005
Seventh impression 1999 Sixth impression 2006
Eighth impression 2000 Seventh impression 2007
Ninth impression 2000 Fourth edition 2008
Second edition 2000 Second impression 2008
Second impression 2001 Third impression 2009
Third impression 2002
ISBN 978 0 627 02712 3
Commissioning editor Lydia Reid
Production manager Werner von Gruenewaldt
Editorial manager Daleen Venter
Copy editor & proofreader Yvonne Kemp
Cover design by Gisela van Garderen
Cover image Digital Source Image Library
Illustrations by Jon Inggs
Typeset in 9.3 on 11 pt Century Old Style by Pace-Setting & Graphics
Printed and bound by Interpak Books, Pietermaritzburg, South Africa
NOTE TO LECTURERS
Contact the marketing department at or on
(012) 342 2765 for a CD-ROM with a test bank and a Microsoft PowerPoint slide
show that accompanies this book.
The title South African workbook for economics is also available as a guide to assist
students to master the material. The book is in a question-and-answer format.
Specifications
Authors: Corné van Walbeek, Waldo Krugell, Nicholas Samouilhan
ISBN: 978 0 627 02720 8
For any further information on this book contact the marketing department at
or on (012) 342 2765.
, 01 26/5/08 2:38 pm Page iii
NOTE TO STU DENTS
Visit our supplementary website to Economics
(for South African students) at learnactive.co.za
W ith the help of Trydian Interactive (Pty) Ltd,
an e-learning development company, a
supporting website has been developed for this
7. You now have full access to the website!
Once you have registered, you don’t need to
repeat this process. The next time you enter the
textbook. The aim of the website is to give stu-
website, you just key in your username and pass-
dents further guidance as they work through the
word, and you’re ready to go.
concepts and content covered by the textbook.
The website is supplementary to the textbook Navigation on learnactive.co.za
and is not a compulsory element for the comple-
Navigation is very simple and straightforward. Just
tion of your studies, but it is a powerful resource.
follow the instructions on screen!
Where can I find the website? After you log on to the website, you are present-
ed with a simple menu structure that can be
The supporting website is part of Trydian Interac- used to jump between the various functionalities.
tive’s learnactive.co.za e-learning solution and
can be accessed at the following web address:
Features of the website
www.learnactive.co.za/vanschaik learnactive.co.za gives you a series of value-
adding functionalities. These include:
Can anyone use the website?
• E-workbook: The e-workbook is an interactive
Yes, the website is open for general use and any compilation of case studies, questions and
student can get access to it. But before you can answers that you can work through, as part of
use the site, you need to register – there’s no your exam preparation, in order to make sure
charge, and it takes a few seconds. Just follow that you understand the content.
these easy steps:
• E-forum: A forum will be available for you to
1. Go to the website: www.learnactive.co.za/ voice your opinions on the content and to dis-
vanschaik. cuss or debate certain economic topics and
2. Click on “Create your own profile”. questions with your fellow students.
3. You will be taken to a screen where you must • Events calendar: You will also get access to
submit information such as your name, your your own calendar where you can schedule
email address, the course you are studying, events, appointments and important dates.
the institution you are studying at, as well as Each time you log on to the website, you will
some other geographical information. receive a reminder about these scheduled
4. You will also be asked to choose a username events.
and a password. We believe that learnactive.co.za will truly add
5. After you have keyed in all the information value to your learning experience and that it will
needed, you will submit the information assist in giving you a better understanding of the
online and a unique profile will be generated subject matter. We invite all economics students
for you. to try the website!
6. At this stage you will be asked to enter a If you need any further information on the learn-
course code. Enter the following code: active.co.za website, please email us at learnac-
VS-Econ001 .
iii
Economics
for South African students
FOURTH EDITION
Philip Mohr, Louis Fourie
and associates
Van Schaik
PUBLISHERS
,01 5/3/09 2:26 pm Page ii
Published by Van Schaik Publishers
1064 Arcadia Street, Hatfield, Pretoria
All rights reserved
Copyright © 2008 P. Mohr
No part of this book may be reproduced or transmitted in any form
or by any electronic or mechanical means, including photocopying
and recording, or by any information storage and retrieval system,
without written permission from the publisher.
First edition 1995 Fourth impression 2003
Second impression 1996 Third edition 2004
Third impression 1997 Second impression 2004
Fourth impression 1998 Third impression 2004
Fifth impression 1998 Fourth impression 2005
Sixth impression 1999 Fifth impression 2005
Seventh impression 1999 Sixth impression 2006
Eighth impression 2000 Seventh impression 2007
Ninth impression 2000 Fourth edition 2008
Second edition 2000 Second impression 2008
Second impression 2001 Third impression 2009
Third impression 2002
ISBN 978 0 627 02712 3
Commissioning editor Lydia Reid
Production manager Werner von Gruenewaldt
Editorial manager Daleen Venter
Copy editor & proofreader Yvonne Kemp
Cover design by Gisela van Garderen
Cover image Digital Source Image Library
Illustrations by Jon Inggs
Typeset in 9.3 on 11 pt Century Old Style by Pace-Setting & Graphics
Printed and bound by Interpak Books, Pietermaritzburg, South Africa
NOTE TO LECTURERS
Contact the marketing department at or on
(012) 342 2765 for a CD-ROM with a test bank and a Microsoft PowerPoint slide
show that accompanies this book.
The title South African workbook for economics is also available as a guide to assist
students to master the material. The book is in a question-and-answer format.
Specifications
Authors: Corné van Walbeek, Waldo Krugell, Nicholas Samouilhan
ISBN: 978 0 627 02720 8
For any further information on this book contact the marketing department at
or on (012) 342 2765.
, 01 26/5/08 2:38 pm Page iii
NOTE TO STU DENTS
Visit our supplementary website to Economics
(for South African students) at learnactive.co.za
W ith the help of Trydian Interactive (Pty) Ltd,
an e-learning development company, a
supporting website has been developed for this
7. You now have full access to the website!
Once you have registered, you don’t need to
repeat this process. The next time you enter the
textbook. The aim of the website is to give stu-
website, you just key in your username and pass-
dents further guidance as they work through the
word, and you’re ready to go.
concepts and content covered by the textbook.
The website is supplementary to the textbook Navigation on learnactive.co.za
and is not a compulsory element for the comple-
Navigation is very simple and straightforward. Just
tion of your studies, but it is a powerful resource.
follow the instructions on screen!
Where can I find the website? After you log on to the website, you are present-
ed with a simple menu structure that can be
The supporting website is part of Trydian Interac- used to jump between the various functionalities.
tive’s learnactive.co.za e-learning solution and
can be accessed at the following web address:
Features of the website
www.learnactive.co.za/vanschaik learnactive.co.za gives you a series of value-
adding functionalities. These include:
Can anyone use the website?
• E-workbook: The e-workbook is an interactive
Yes, the website is open for general use and any compilation of case studies, questions and
student can get access to it. But before you can answers that you can work through, as part of
use the site, you need to register – there’s no your exam preparation, in order to make sure
charge, and it takes a few seconds. Just follow that you understand the content.
these easy steps:
• E-forum: A forum will be available for you to
1. Go to the website: www.learnactive.co.za/ voice your opinions on the content and to dis-
vanschaik. cuss or debate certain economic topics and
2. Click on “Create your own profile”. questions with your fellow students.
3. You will be taken to a screen where you must • Events calendar: You will also get access to
submit information such as your name, your your own calendar where you can schedule
email address, the course you are studying, events, appointments and important dates.
the institution you are studying at, as well as Each time you log on to the website, you will
some other geographical information. receive a reminder about these scheduled
4. You will also be asked to choose a username events.
and a password. We believe that learnactive.co.za will truly add
5. After you have keyed in all the information value to your learning experience and that it will
needed, you will submit the information assist in giving you a better understanding of the
online and a unique profile will be generated subject matter. We invite all economics students
for you. to try the website!
6. At this stage you will be asked to enter a If you need any further information on the learn-
course code. Enter the following code: active.co.za website, please email us at learnac-
VS-Econ001 .
iii
