2025 - ECS3702 - ASSESSMENT 1 - QUESTIONS AND ANSWERS - SEMESTER 2

2025 – S1 - ECS3702 – ASSESSMENT 1 – Q&A


QUIZ

Assessment 1
Started on Thursday, 3 April 2025,
State Finished
Completed on Thursday, 3 April 2025,
Time taken
Marks 50.00/50.00
Grade 100.00 out of 100.00


Question 1
A stimulation of the South African economy will result in

[1] increased demand for goods and services

[2] increased imports

[3] decreased imports

[4] decreased demand for goods and services

A) 1 and 2

B) and 3

C) 2 and 4

D) Only 1



a.
Only 1
b.
1 and 2
c.
Only 3
d.
2 and 4

Feedback

1

,2025 – S1 - ECS3702 – ASSESSMENT 1 – Q&A


The correct answer is: 1 and 2



Question 2
Assumption 3 of the H-O theory; commodity X is labour intensive, and commodity Y
is capital intensive in both countries means that

a.
the capital-labour ratio is the same for good X than good Y
b.
the capital-labour ratio is lower for good X than good Y
c.
the capital-labour ratio is higher for good X than good Y
d.
the labour-capital ratio is lower for good X than good Y

Feedback
The correct answer is: the capital-labour ratio is lower for good X than good Y



Question 3
a.
Trade is positive sum game
b.
Trade is negative sum game
c.
Trade is win-win
d.
Trade is a zero-sum game

Feedback
The correct answer is: Trade is a zero-sum game



Question 4
The concavity of the PPF reflects

a.


2

,2025 – S1 - ECS3702 – ASSESSMENT 1 – Q&A


That country B must give up increasing amounts of flowers to produce each
additional 20 units of shoes
b.
That country A faces only increasing opportunity cost in the production of flowers
c.
Increasing opportunity cost in the production of flowers and shoes for both countries
d.
That country A must give up increasing amounts of shoes to produce each additional
15 units of flowers

Feedback
The correct answer is: That country A faces only increasing opportunity cost in the
production of flowers



Question 5
The explanation of the impact of international trade on relative prices and income
within nations was provided by the

a.
H-O theory
b.
The factor proportions theory
c.
The factor-price equalisation theorem
d.
Stolper-Samuelson theory

Feedback
The correct answer is: Stolper-Samuelson theory



Question 6
(iv) According to Smith, the quantity of world output is a fixed

a.
Only (iii)
b.

3

, 2025 – S1 - ECS3702 – ASSESSMENT 1 – Q&A


All of the above
c.
(i) and (ii)
d.
(i) and (iii)

Feedback
The correct answer is: Only (iii)



Question 7
Use the table below on South Africa and Botswana to answer the question that
follows.

South Africa Botswana

Good A Good B Good A Good B

Labour per unit 16 12 14 10

Capital per unit 4 6 7 10

Suppose South Africa’s total capital stock is 120 and total labour stock is 20, and
Botswana’s total capital stock is 200 and total labour stock is 50. Which country is
capital abundant?

a.
None of the countries
b.
Botswana
c.
Both countries
d.
South Africa

Feedback
The correct answer is: South Africa



Question 8


4