ECO162 (STADIO) Assignment 1 (QUALITY ANSWERS) Semester 1 2024

This document contains workings, explanations and solutions to the ECO162 Assignment 1 (QUALITY ANSWERS) Semester 1 2024 - For assistance call or Whats-App us on 0.6.8...8.1.2...0.9.3.4........ Task 1A (34 marks) Market structures refer to how different industries are classified according to the characteristics they have. In Economics we have four different market structures, namely perfect competition, monopolistic competition, oligopoly and the monopoly structure. These structures differ based on the nature of the products they produce, the number of firms in the industry as well as the competition which takes place within the firms. STADIO ASSIGNMENTS 2024 SEMESTER 1 Economics I/ECO162/SF1 Page 2 of 6 INSTRUCTIONS Choose two companies of your choice and explain the barriers that they have implemented to prevent or control the level of competition they have under the following markets: Oligopoly competition and monopolistic competition. a. Based on your research, explain the market structures above using the companies of your choice (1 x 2) b. Discuss the barriers put in place in that industry to mitigate competition (5 x 2) c. Discuss whether the barriers have had a positive or negative impact on the industry. (5 x 2) d. Discuss the impact of the barriers implemented on the households and the economy (6 x 2) Task 1B (15 marks) (Wendy Mbatha, 2022) STADIO ASSIGNMENTS 2024 SEMESTER 1 Economics I/ECO162/SF1 Page 3 of 6 Magaxa opened the debate on “building a mixed South African economy” during a miniplenary session this afternoon. The theme of the debate is “building a state-led South African mixed economy, with the participation of both public and private sectors, to contribute towards a new trajectory of inclusive growth and to address the Apartheid legacy of exclusion”. Political parties had mixed views on the mixed economy. Magaxa says when compared to other mixed economies in the developing world, South Africa’s mixed economy does not live up to the economic potential attributed to mixed economies. “To put a mixed economy’s success into perspective, consider the case of Sweden. It boosts strong property rights and it’s also open to international trade and foreign direct investment, yet Sweden has a strong aggressive social insurance and robust distribution based on public expenditure on Public Social welfare programme such as old age pensions, family allowances, health insurance and housing subsidies.” When he participated in the debate, DA MP Jan De Villiers touched on cadre deployment against failed state-owned entities. “ANC cadre deployment is the root cause of every single failure of government to even attempt to creating a more inclusive society. The failure of Eskom, SAA, PRASA, SABC, the list goes on and on. What do all these failed state institutions have in common? ANC cadre deployment and corruption, because the only way the ANC fat cats can enrich themselves is through the mechanisms of cadre deployment.” But Co-operative Governance and Traditional Affairs Deputy Minister, Thembisile Nkadimeng, hit back at De Villiers over cadre deployment. “Listening to you telling us about cadre deployment in the Democratic Alliance, let me refresh their memory, Marietta Steenkamp, 16 May 2018, City of Tshwane, not qualified. Wow, was that enough? Pravin Govender falsified his certification of a fire official in 2019. De Villiers, a body builder in the City of Ekurhuleni, was fired previously from the City of Tshwane, but is currently employed,” says Nkadimeng. EFF MP Yoliswa Yako says the ANC cannot speak about a state-led mixed economy when every part of the economy is controlled by the private sector, under its watch. “What is more troubling is that at a time when the ANC together with its alliances, COSATU and the SACP are going full steam ahead with privatisation and liquidation of a strategic owned enterprise, the former Western Cape Secretary of the SACP still thinks that there could be a state led mixed economy when the private sector controls all strategic sectors of the economy, including energy generation, transport, ports, telecommunications, finance and mineral resources”, says Yako. IFP MP Elphas Buthelezi, says the ANC has not been interested in building an inclusive economy. Buthelezi says the governing party’s actions over its years in power has demonstrated how it failed to build the economy. “South Africa currently ranks 82 in doing business ranking in comparison with our business counterparts. As the IFP we have always believed that strong partnership between government and the private sector is what we need to build a strong economy. And overall, a prosperous country.” Freedom Front Plus MP Frederik Mulder says South Africa needs an economy that is more inclusive and stable. STADIO ASSIGNMENTS 2024 SEMESTER 1 Economics I/ECO162/SF1 Page 4 of 6 “For the economy to function at its best, it needs to be growing, sustainable, and stable. But there is more to it. It’s not simply that the economy should be merely growing, but that it’s growing for all people. It is not just creating stability for some people but creating stability so that every person is free from worry about financial roadblocks and unforeseen issues.” The ACDP Chief Whip, Steve Swart, says a capable state is also key to ensuring a thriving economy. “Alongside a capable state, the country needs a thriving public sector, and a private sector that is investing in productive capacity. As private sector employment increases, more livelihoods are supported and sustained. “ Al Jama-Ah Leader, Ganief Hendricks, says South Africa consists of a first and third world economy, which defines the economic status of the country. “Considering these, one may argue that South Africa continues to have a mixed economy despite the fact that it continues to own state-owned entities such as Sasol and Iscor, entities that unfortunately have been sold off to the private sector and this has been with no tangible financial return to the public. In fact, it is the latter that supported it financially for several years with the purpose of transforming South Africa’s commercial sector into a viable independent one. This sadly, honourable House chair, did not happen. For the record, while Iscor has been stripped of its assets, Sasol was conveniently privatised.” The African Independent Congress or AIC’s Steven Jafta, says South Africa has to accept that it is part of the global economy. “The South African economy exists in a globalised economic order. This means we can no longer prescribe solutions to our economic realities due to the pressures of the global world. In this regard, we have to move away from mere slogans and sound bites to radical economic policies with real traction to improving the lives of our people.” National Freedom Party Parliamentary Leader Ahmed Shaik-Emam says while the NFP supports a mixed economy, the cost of doing business is very expensive, especially for small businesses. “If we want economic growth in a mixed economy, we must create an environment. If you look, chairperson, at the cost of doing business, particularly for small businesses, and the red tape that exists, it makes it very difficult for them to survive.” Source: economy/ (Wendy Mbatha, 2022) - emended a. Discuss why most countries are investing in pursuing the mixed system instead of the capitalist system. (10) b. Explain the disadvantages of having the central authority determine what goods and services would be produced, how the goods and services will be produced and for whom the goods and services would be produced. (5) FORMAT Document your answers for Tasks 1A and 1B in a Word document, clearly numbered as indicated in the tasks. Once you have completed both Task 1 and Task 2, print your Word document to pdf and submit to Canvas. STADIO ASSIGNMENTS 2024 SEMESTER 1 Economics I/ECO162/SF1 Page 5 of 6 TECHNICAL REQUIREMENTS Remember to include in-text referencing as well as a reference list for all sources consulted (including the AI tool used, if applicable). Task 2 (26 marks) Read and analyse the cartoon below and answer the questions that follow regarding the recent BRICS summit held in South Africa, 2023. Source: INSTRUCTIONS Consult your study material as well as articles from accredited journals available on Google Scholar or STADIO’s online library and answer the following questions. 2.1 Discuss the three pillars of cooperation established by the BRICS organisation. (2 x 3) 2.2 Discuss the difference between the G7 organisation and BRICS. (2 x 3) 2.3 Explain the benefits of BRICS for the four participants under the following headings: Households, Business, Financial Markets and Government. (4 x 3) 2.4 Examine the dynamics of the rand/dollar exchange rate both prior to and following the BRICS summit, considering total economic growth. (2)