ECS1601 ASSIGNMENT 1 S1 & S2 2021
Economics 1B ECS1601
Semesters 1 & 2: Department of Economics
Unique number 652443
1.1 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
[1] a is incorrect, b is correct
[2] both a and b are incorrect
[3] only a is correct
[4] both a and b are correct
Economic theory suggests that households possess unlimited wants, yet they are faced with
limited resources hence the need to make rational choices.
1.2 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.
[1] only b is correct
[2] a and b are both incorrect
[3] only a is correct
[4] both a and b are correct
The study guide and textbook clearly states that Inflation is a Macroeconomic objective/problem
because it affects the aggregate economy. The supermarket is a microeconomic phenomenon.
1.3 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
A stock has no time dimension and can only be measured at a specific moment. The balance
on Sibahle’s savings account can only be checked at a given point in time (See Philip mohr
Pg 41)
1.4 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
The regulation of the ‘Market forces’ has a distortionary effect in such a case it leads to
shortages because the price will be artificially gazetted lower than the market clearing price.
1.5 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
2
Economics 1B ECS1601
Semesters 1 & 2: Department of Economics
Unique number 652443
1.1 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
[1] a is incorrect, b is correct
[2] both a and b are incorrect
[3] only a is correct
[4] both a and b are correct
Economic theory suggests that households possess unlimited wants, yet they are faced with
limited resources hence the need to make rational choices.
1.2 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.
[1] only b is correct
[2] a and b are both incorrect
[3] only a is correct
[4] both a and b are correct
The study guide and textbook clearly states that Inflation is a Macroeconomic objective/problem
because it affects the aggregate economy. The supermarket is a microeconomic phenomenon.
1.3 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
A stock has no time dimension and can only be measured at a specific moment. The balance
on Sibahle’s savings account can only be checked at a given point in time (See Philip mohr
Pg 41)
1.4 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
The regulation of the ‘Market forces’ has a distortionary effect in such a case it leads to
shortages because the price will be artificially gazetted lower than the market clearing price.
1.5 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
2
