ECS1501/202/1/2020
Tutorial Letter 202/1/2020
ECONOMICS 1A
ECS1501
Department of Economics
First Semester
This tutorial letter contains the solutions to the self-assessment assignment.
, Dear student
The purpose of this tutorial letter is to provide you with the correct answers to the self-assessment
assignment.
You are almost at the end of this module, and examinations are around the corner, it is therefore that you
learn from the mistake you made in this assignment. If you had an incorrect answer, use it as a valuable
learning opportunity by finding out why you were wrong and what the correct answer is. Even if you had an
answer correct, make sure that you understood it and not merely guessed the correct answer. This work is
important and it will be covered in the examinations as well.
4.1 The correct alternative is [1].
The amount a firm receives from the sale of its output is called total revenue, TR = P x Q.
4.2 The correct alternative is [3].
By investing financial capital in a firm, the owner is giving up the interest he or she could have earned at a
commercial bank.
4.3 Both alternatives [1] and [3] are correct.
Remember,
Accounting profit = total revenue (TR) – total explicit cost
Economic profit = total revenue (TR) – total cost, where total cost = explicit + implicit cost
Say for instance, TR = R50 000, total explicit cost = R40 000 and total implicit cost = R20 000.
Accounting profit = total revenue (TR) – total explicit cost
= R50 000 – R40 000 = R10 000.
Economic profit = total revenue (TR) – (total explicit cost + total implicit cost)
= R50 000 – (R40 000 + R20 000)
= R50 000 – R60 000 = -R10 000.
4.4 The correct alternative is [2].
𝑻𝑷
𝑨𝑷
number of workers
Thus, for twenty, the average product is:
230
20
11,5
2
Tutorial Letter 202/1/2020
ECONOMICS 1A
ECS1501
Department of Economics
First Semester
This tutorial letter contains the solutions to the self-assessment assignment.
, Dear student
The purpose of this tutorial letter is to provide you with the correct answers to the self-assessment
assignment.
You are almost at the end of this module, and examinations are around the corner, it is therefore that you
learn from the mistake you made in this assignment. If you had an incorrect answer, use it as a valuable
learning opportunity by finding out why you were wrong and what the correct answer is. Even if you had an
answer correct, make sure that you understood it and not merely guessed the correct answer. This work is
important and it will be covered in the examinations as well.
4.1 The correct alternative is [1].
The amount a firm receives from the sale of its output is called total revenue, TR = P x Q.
4.2 The correct alternative is [3].
By investing financial capital in a firm, the owner is giving up the interest he or she could have earned at a
commercial bank.
4.3 Both alternatives [1] and [3] are correct.
Remember,
Accounting profit = total revenue (TR) – total explicit cost
Economic profit = total revenue (TR) – total cost, where total cost = explicit + implicit cost
Say for instance, TR = R50 000, total explicit cost = R40 000 and total implicit cost = R20 000.
Accounting profit = total revenue (TR) – total explicit cost
= R50 000 – R40 000 = R10 000.
Economic profit = total revenue (TR) – (total explicit cost + total implicit cost)
= R50 000 – (R40 000 + R20 000)
= R50 000 – R60 000 = -R10 000.
4.4 The correct alternative is [2].
𝑻𝑷
𝑨𝑷
number of workers
Thus, for twenty, the average product is:
230
20
11,5
2
