Economics ECS1601 Questions with Correct Answers.

Which of the following is/are correct? a) Households are confronted with unlimited wants, but with limited resources with which to satisfy those wants b) The scarcity of resources necessitate households to make choices Correct Answer both a and b are correct Which of the following is/are correct regarding the distinction between macroeconomics and microeconomics? a) The price of apples at the supermarket is an example of a macroeconomic variable. b) An increase in the general price level (inflation) in the economy is an example of a macroeconomic variable. Correct Answer only b is correct A flow variable is defined as a variable that is measured over a period. Which one of the following variables is not an example of a flow variable? [1] National income [2] The balance on Sibahle's savings account [3] Budget deficit [4] Total production Correct Answer [2] The balance on Sibahle's savings account Which of the following is not an acceptable intervention by the public sector in a mixed economy? [1] the provision of funds for public goods such as parks and streetlights [2] regulation of the pricing behaviour of monopoly industries [3] stabilisation of the economy during periods of economic instability [4] regulation of the price increases that result from changes in patterns of demand and supply in the competitive market Correct Answer [4] regulation of the price increases that result from changes in patterns of demand and supply in the competitive market The factors of production in an economy are ... [1] households, capital, land, entrepreneurship [2] government, household, firms, natural resources [3] natural resources (land), labour, capital, and entrepreneurship [4] human capital, land, natural resources, technology Correct Answer [3] natural resources (land), labour, capital, and entrepreneurship Which of the following are the remuneration of the factors of production? [1] natural resources, rent, interest, labour [2] rent, salaries and wages, interest, profit [3] households, land, profit, capital [4] entrepreneur, firms, capital, labour Correct Answer [2] rent, salaries and wages, interest, profit In the circular flow of income and spending ... [1] savings, imports, taxes are leakages, while investment, government spending, exports are injections. [2] imports, taxes, investments are leakages, while exports, investments, government spending are injections. [3] savings, exports, taxes area leakages, while imports, investments, government spending are injections. [4] savings, government spending, imports are leakages, while investments, exports, taxes are injections. Correct Answer [1] savings, imports, taxes are leakages, while investment, government spending, exports are injections. In the circular flow of goods and services ... [1] firms sell factors of production on the goods market. [2] goods and services offered for sale on the goods market are purchased by firms. [3] households combine factors of production and produce consumer goods and services. [4] households offer factors of production in the factor market. Correct Answer [4] households offer factors of production in the factor market. What does the letters A, B, C and D in the figure represent? a) A represents factors of production b) B represents goods and services c) C represents foreign sector d) D represents spending by firm [1] only a is correct [2] only b and c are correct [3] only b and d are correct [4] a and b are correct, while c and d are incorrect Correct Answer [3] only b and d are correct Which of the following is not an injection into the economy of South Africa? [1] A domestic company in South Africa sells leather to a client that is in Italy.