ECONOMICS
1 © Noted Summaries Grade 10 Economics
www.notedsummaries.co.za
, BASIC ECONOMIC CONCEPTS & PRINCIPLES
WHAT IS ECONOMICS? ECONOMIC PROBLEM
social science that examines how individuals, households, and firms SCARCITY PROBLEM
satisfy their unlimited needs and wants with limited and scarce
resources to satisfy the unlimited wants and needs of society with the use of
limited resources
→ People only have a limited amount of money BUT many needs and
desires to satisfy
→ The government also has a limited amount of money and cannot
NEEDS WANTS satisfy all its desires
= goods and services ESSENTIAL for = human desires for goods and services
basic survival ECONOMIC SYSTEM [3 CENTRAL QUESTIONS]
Z fancy technology
Z Housing & Safety Z trendy clothes/attire 1. OUTPUT QUESTION
Z Food Z Treats (food and gifts)
Z Water → WHAT GOODS AND SERVICES WILL BE PRODUCED
AND IN WHAT QUANTITIES?
OPPORTUNITY COST
DEMAND 2. INPUT/INPUT QUESTION
= the loss of other alternatives when one
= occurs when consumers are able and alternative is chosen → HOW will each of the goods and services be
willing to buy a product at a certain price = loss of value/benefit that would have been
produced?
caused by participating in a certain activity → HOW MANY of the scarce resources will be used in
= desires become real demand
relative to an alternative activity that
the production of each good
provides a higher return in value or benefit
I want a Ford Figo but have demand = Playoff between wants and needs 3. DISTRIBUTION QUESTION
for a Kia Picanto
= FOR WHOM will the goods and services be produced?
2 © Noted Summaries Grade 11 Economics = WHO will receive the goods and services?
www.notedsummaries.co.za
, CENTRALLY PLANNED ECONOMY MARKET ECONOMY [FREE MARKET SYSTEM]
BUSINESS→STATE GOVERNMENT → NOT ACTIVELY
INVOLVED
STATE→ PROFIT & PROVIDE SERVICES
(ECONOMIC DECISION IS MADE BY INDIVIDUALS)
(GOVERNMENT CONTROLLED ECONOMY) = an economic system in which economic decisions are made by
private individuals who own the factors of production
→ Government controls the factors of production (STATE)
→ Private individuals own and control the factors of production
→ Government decides what goods and services are produced
→ Business competition + specialisation of manufacturing products
→ Government decides how these goods and services are produced that make GREATEST PROFIT [desire to make the greatest possible
→ Government decides who will be the consumers of these goods and profit]
services → Absence of central plan
→ Coercion > achieve of economic goals → Individuals decide what goods and services will be used.
→ Decisions coordinated on demand + supply (price determined by
interaction)
ADVANTAGES DISADVANTAGES
→ Reduce inequality
→ EMPLOYMENT☞ STABLE
→
→
Low worker motivation
Short of consumer goods
ADVANTAGES DISADVANTAGES
ECONOMY → Restricted of Freedom → good way of allocating resources in
→ Economic inequality
→ Economic equality → Absence of competition = lack of an efficient manner
→ Market backlash > state
→ Resources are used for the consumer choice → production = efficient
intervention
collective benefit of all → Absence of profit motive → high economic growth
→ Self-interest = lack of concern >
→ Economically vulnerable people → Entrepreneurs are → freedom of action, ownership,
careless use of resources
are protected freedom of speech
discouraged → Exploitation
→ Price = administered → entrepreneurship is encouraged
→ Government controls → public goods and services not
→ Dealing with outside factors and rewarded
everything provided/scarcity provided
→ State = infrastructure + services
→ resources are not shared → little government interference
→ No waste (competition) → trading cycles
equally → individuals have freedom of choice
→ unequal distribution of income
of wide range of products
3 © Noted Summaries Grade 11 Economics www.notedsummaries.co.za
, MIXED ECONOMY [SOUTH AFRICA]
GLOBALISATION
Trend towards greater economic integration and cooperation between
= mixture of private and state control over the economy [market
different countries
capitalism + central planning]
→ Capital derived from banks, shares, and government[expended tax
GLOBAL ECONOMY
revenue]
→ Privatisation + nationalisation
→ Government spends money on public services GLOBALISATION OF PRODUCTION MARKETS,
→ Government implements legislation to control economic activity [e. FINANCE, COMMUNICATIONS AND THE WORK
Affirmative action in SA] > monetary + fiscal policy FORCES
→ Profit motive + competition
→ Natural resources + businesses = privately owned (ECONOMY OF THE WORLD)
Features of global economy:
→ Free Trade in Goods and Services
ADVANTAGES DISADVANTAGES → Free movement of labour
→ good economic growth → Profit motive = self-interest + lack of
→ Free movement of capital
→ Government = promote concern for the poor (= POVERTY)
equilibrium growth of the → State-owned enterprise = NO
economy [income more equally COMPETITION = monopolies
than in market economy]
→ Private businesses are urged to
→ Government opinion = ↓ employment
= more unemployment
ADVANTAGES DISADVANTAGES
contribute to the welfare of → Unfair competition and more
→ Unemployment FREE TRADE = EXPORTS AND IMPORTS ↑ WHICH CAUSES:
citizens beneficial for developed countries
→ Inflation → Competition between producers ↑ + prices for consumers ↓.
→ Competition is promoted [+ → greater range of goods and services
→ Trading cycles → Exploitation of workers due to
protect citizens] → Expanding export markets for domestic manufacturers = being
→ Uneven investors paying low wages
→ Freedom of choice + private able to sell more goods + earning more revenue
property of land + businesses Economic THE FREE MOVEMENT OF LABOUR: → Outflow of skills due to skilled
→ State improves social welfare (the Distribution → opportunity to increase income + standard of living ↑ > best labour leaving the country in
jobs t search of high wages
poor) → TAX! → ↓ unemployment figure in underdeveloped areas + distribution
→ Private + infrastructure (state) = of skills and knowledge between countries.
economic growth THE FREE MOVEMENT OF CAPITAL
→ Stimulate investment in poor countries
→ Lead to job creation and economic growth
4 © Noted Summaries Grade 11 Economics www.notedsummaries.co.za
1 © Noted Summaries Grade 10 Economics
www.notedsummaries.co.za
, BASIC ECONOMIC CONCEPTS & PRINCIPLES
WHAT IS ECONOMICS? ECONOMIC PROBLEM
social science that examines how individuals, households, and firms SCARCITY PROBLEM
satisfy their unlimited needs and wants with limited and scarce
resources to satisfy the unlimited wants and needs of society with the use of
limited resources
→ People only have a limited amount of money BUT many needs and
desires to satisfy
→ The government also has a limited amount of money and cannot
NEEDS WANTS satisfy all its desires
= goods and services ESSENTIAL for = human desires for goods and services
basic survival ECONOMIC SYSTEM [3 CENTRAL QUESTIONS]
Z fancy technology
Z Housing & Safety Z trendy clothes/attire 1. OUTPUT QUESTION
Z Food Z Treats (food and gifts)
Z Water → WHAT GOODS AND SERVICES WILL BE PRODUCED
AND IN WHAT QUANTITIES?
OPPORTUNITY COST
DEMAND 2. INPUT/INPUT QUESTION
= the loss of other alternatives when one
= occurs when consumers are able and alternative is chosen → HOW will each of the goods and services be
willing to buy a product at a certain price = loss of value/benefit that would have been
produced?
caused by participating in a certain activity → HOW MANY of the scarce resources will be used in
= desires become real demand
relative to an alternative activity that
the production of each good
provides a higher return in value or benefit
I want a Ford Figo but have demand = Playoff between wants and needs 3. DISTRIBUTION QUESTION
for a Kia Picanto
= FOR WHOM will the goods and services be produced?
2 © Noted Summaries Grade 11 Economics = WHO will receive the goods and services?
www.notedsummaries.co.za
, CENTRALLY PLANNED ECONOMY MARKET ECONOMY [FREE MARKET SYSTEM]
BUSINESS→STATE GOVERNMENT → NOT ACTIVELY
INVOLVED
STATE→ PROFIT & PROVIDE SERVICES
(ECONOMIC DECISION IS MADE BY INDIVIDUALS)
(GOVERNMENT CONTROLLED ECONOMY) = an economic system in which economic decisions are made by
private individuals who own the factors of production
→ Government controls the factors of production (STATE)
→ Private individuals own and control the factors of production
→ Government decides what goods and services are produced
→ Business competition + specialisation of manufacturing products
→ Government decides how these goods and services are produced that make GREATEST PROFIT [desire to make the greatest possible
→ Government decides who will be the consumers of these goods and profit]
services → Absence of central plan
→ Coercion > achieve of economic goals → Individuals decide what goods and services will be used.
→ Decisions coordinated on demand + supply (price determined by
interaction)
ADVANTAGES DISADVANTAGES
→ Reduce inequality
→ EMPLOYMENT☞ STABLE
→
→
Low worker motivation
Short of consumer goods
ADVANTAGES DISADVANTAGES
ECONOMY → Restricted of Freedom → good way of allocating resources in
→ Economic inequality
→ Economic equality → Absence of competition = lack of an efficient manner
→ Market backlash > state
→ Resources are used for the consumer choice → production = efficient
intervention
collective benefit of all → Absence of profit motive → high economic growth
→ Self-interest = lack of concern >
→ Economically vulnerable people → Entrepreneurs are → freedom of action, ownership,
careless use of resources
are protected freedom of speech
discouraged → Exploitation
→ Price = administered → entrepreneurship is encouraged
→ Government controls → public goods and services not
→ Dealing with outside factors and rewarded
everything provided/scarcity provided
→ State = infrastructure + services
→ resources are not shared → little government interference
→ No waste (competition) → trading cycles
equally → individuals have freedom of choice
→ unequal distribution of income
of wide range of products
3 © Noted Summaries Grade 11 Economics www.notedsummaries.co.za
, MIXED ECONOMY [SOUTH AFRICA]
GLOBALISATION
Trend towards greater economic integration and cooperation between
= mixture of private and state control over the economy [market
different countries
capitalism + central planning]
→ Capital derived from banks, shares, and government[expended tax
GLOBAL ECONOMY
revenue]
→ Privatisation + nationalisation
→ Government spends money on public services GLOBALISATION OF PRODUCTION MARKETS,
→ Government implements legislation to control economic activity [e. FINANCE, COMMUNICATIONS AND THE WORK
Affirmative action in SA] > monetary + fiscal policy FORCES
→ Profit motive + competition
→ Natural resources + businesses = privately owned (ECONOMY OF THE WORLD)
Features of global economy:
→ Free Trade in Goods and Services
ADVANTAGES DISADVANTAGES → Free movement of labour
→ good economic growth → Profit motive = self-interest + lack of
→ Free movement of capital
→ Government = promote concern for the poor (= POVERTY)
equilibrium growth of the → State-owned enterprise = NO
economy [income more equally COMPETITION = monopolies
than in market economy]
→ Private businesses are urged to
→ Government opinion = ↓ employment
= more unemployment
ADVANTAGES DISADVANTAGES
contribute to the welfare of → Unfair competition and more
→ Unemployment FREE TRADE = EXPORTS AND IMPORTS ↑ WHICH CAUSES:
citizens beneficial for developed countries
→ Inflation → Competition between producers ↑ + prices for consumers ↓.
→ Competition is promoted [+ → greater range of goods and services
→ Trading cycles → Exploitation of workers due to
protect citizens] → Expanding export markets for domestic manufacturers = being
→ Uneven investors paying low wages
→ Freedom of choice + private able to sell more goods + earning more revenue
property of land + businesses Economic THE FREE MOVEMENT OF LABOUR: → Outflow of skills due to skilled
→ State improves social welfare (the Distribution → opportunity to increase income + standard of living ↑ > best labour leaving the country in
jobs t search of high wages
poor) → TAX! → ↓ unemployment figure in underdeveloped areas + distribution
→ Private + infrastructure (state) = of skills and knowledge between countries.
economic growth THE FREE MOVEMENT OF CAPITAL
→ Stimulate investment in poor countries
→ Lead to job creation and economic growth
4 © Noted Summaries Grade 11 Economics www.notedsummaries.co.za
