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BACHELOR OF BUSINESS
ADMINISTRATION
Title: ECONOMICS I
ASSIGNMENT
Student Name: [Insert
your name]
Student Number: [Insert
your student number]
Professor Name: [Insert
professor's name]
Due Date: [Insert due date]
|
Table of Contents |
|
1.0 Introduction
.....................................................................................................
[Page No. 3] |
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2.0 Question 1
.......................................................................................................
[Page No.4 ] |
|
2.1 List and
briefly explain the four participants who influence the flows of production,
income and expenditure in an economy.
|
|
2.2 Draw a
production possibility frontier showing a combination of two goods that a
country could produce, and an area of inefficiency and another that is
unattainable |
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3.0 Question 2
.......................................................................................................
[Page No.7 ] |
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3.1 Explain why
international trade takes place by discussing these two concepts with the aid
of an example: |
|
• Absolute
advantage; and |
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• Comparative
advantage.
|
|
3.2 Critically
discuss the economic concept at work in the scenario below: |
|
"Nouvelle
Nougat experienced a boom under the national lockdown and the opening of its
online store. In one week the patisserie fulfilled 250 orders. To capitalize
on this market, the owners, Nou and Elle, hired two additional pastry chefs,
which gave them a total of 10 pastry chefs working in the kitchen. As a
result, input of resources, increased by 25% and output increased by
82%.”
|
|
3.3 What is the
difference between an open and a closed economy? Has South Africa ever been a
closed economy?
|
|
4.0 Question 3 .....................................................................................................
[Page No.10 ] |
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4.1 Discuss the
difference between market and command economies. In your response, make use
of examples
|
|
4.2 Critically
discuss GDP as an economic indicator, and its strengths and weaknesses |
|
5.0 Question 4
.....................................................................................................
[Page No.12 ] |
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5.1 South Africa
is a major platinum producer. Suppose the world price of platinum were to
rise, due to increased demand, as a result of the turbulent economic climate
of late. Using a diagram explain how this change in the industry will impact
the exchange rate between the rand and the dollar, ceteris paribus. |
|
6.0 Conclusion
.....................................................................................................
[Page No.13 ] |
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7.0 References .....................................................................................................
[Page No.14 ] |
Introduction
Macroeconomics is a branch of economics that deals with the
performance, structure, and behavior of the entire economy rather than
individual markets or businesses. It examines the economy as a whole and looks
at the relationships between key economic indicators, such as gross domestic
product (GDP), inflation, unemployment, and international trade.
Some relevant concepts in macroeconomics include:
- Gross Domestic Product (GDP): This is the total value of all
goods and services produced in a country over a given period, usually a
year.
- Inflation: This is the rate at which the
general level of prices for goods and services is rising, and it is
usually measured using the Consumer Price Index (CPI).
- Unemployment: This refers to the number of
people who are willing and able to work but cannot find employment.
- Fiscal Policy: This refers to the government's
use of taxes and spending to influence the economy. For example, the
government may increase spending during a recession to stimulate economic
growth.
- Monetary Policy: This refers to the actions taken
by a country's central bank to control the supply and cost of money in the
economy. For example, the central bank may lower interest rates to
encourage borrowing and stimulate economic activity.
- International Trade: This refers to the exchange of
goods and services between countries. Macroeconomics examines the effects
of international trade on a country's economy, such as the balance of
trade, which is the difference between a country's exports and imports.
ASSIGNMENT QUESTIONS
QUESTION 1 (20
MARKS)
1.1 List and briefly
explain the four participants who influence the flows of production, income and
expenditure in an economy. (12)
Answer: In an economy, there are four key participants
who play a crucial role in influencing the flows of production, income, and
expenditure. These participants are households, businesses, the government, and
international actors.
- Households: Households are the primary
consumers in an economy. They purchase goods and services from businesses,
and in return, they receive income in the form of wages, salaries, and
profits. Households also save a portion of their income and invest it in
different financial assets.
- Businesses: Businesses are the
1.2 Draw a production
possibility frontier showing a combination of two goods that a country could
produce, and an area of inefficiency and another that is unattainable. (8)
Answer: Here's a more detailed step-by-step guide on
how to draw a production possibility frontier (PPF) showing a combination of
two goods that a country could produce, and an area of inefficiency and another
that is unattainable:
Step 1: Define
the two goods First, we need to define the two goods that the country can
produce. For this example, let's say the
QUESTION 2 [26 MARKS]
2.1 Explain why
international trade takes place by discussing these two concepts with the aid
of an example:
• Absolute advantage;
and
• Comparative
advantage. (8)
Answer:
International trade takes place because different countries have
different levels of efficiency in producing certain goods or services. These
differences in efficiency give rise to two concepts that explain why
international trade takes place: absolute advantage and comparative advantage.
2.2 Critically discuss
the economic concept at work in the scenario below:
"Nouvelle Nougat
experienced a boom under the national lockdown and the opening of its online
store. In one week the patisserie fulfilled 250 orders. To capitalize on this
market, the owners, Nou and Elle, hired two additional pastry chefs, which gave
them a total of 10 pastry chefs working in the kitchen. As a result, input of
resources, increased by 25% and output increased by 82%.”
(12)
Answer: The
economic concept at work in this scenario is the concept of economies of scale.
Economies of scale refer to the cost advantages that a business can achieve by
increasing its output and expanding its scale of production. In other words, as
a business produces more goods or services, the cost per unit of production
decreases,
2.2 What is the
difference between an open and a closed economy? Has South Africa ever been a
closed economy? (6)
Answer: An open economy is an economy
that has trade relations with other countries, where goods and services can freely
flow across borders. An open economy allows for the free movement of goods,
services, and capital, which enables a country to benefit from the global
economy's growth and development. In contrast, a closed economy is an economy
that does not engage in international trade and has no foreign
QUESTION 3 [24 MARKS]
3.1 Discuss the
difference between market and command economies. In your response, make use of
examples (12)
Answer: Market
and command economies represent two contrasting economic systems that differ in
how they allocate resources and make economic decisions. In a market economy,
resources are allocated based on the decisions made by consumers and producers,
while in a command economy, resources are allocated based on the
3.2 Critically discuss
GDP as an economic indicator, and its strengths and weaknesses. (12)
Answer: Gross Domestic Product (GDP) is one of the
most commonly used economic indicators for measuring the size and growth of an
economy. GDP is the total value of all goods and services produced within a
country's borders in a given period, typically measured annually or quarterly.
While GDP is a widely used indicator, it has both strengths and weaknesses.
One of the key strengths of GDP is that it provides a broad
measure of economic activity, including both the goods and
QUESTION 4 [30 MARKS]
South Africa is a major
platinum producer. Suppose the world price of platinum were to rise, due to
increased demand, as a result of the turbulent economic climate of late. Using
a diagram explain how this change in the industry will impact the exchange rate
between the rand and the dollar, ceteris paribus.
Answer: If the world price of
platinum were to rise, this would increase the demand for South African
platinum exports. As a result, the quantity of platinum supplied by South
Africa would increase, leading to an increase in export earnings and an inflow
of foreign currency into the country. This increase in demand and export
earnings would lead to an increase in the demand for the South African rand.
Conclusion
In conclusion, macroeconomics provides a comprehensive
framework for understanding the functioning and performance of an entire
economy. By focusing on key economic indicators such as GDP, inflation,
unemployment, and international trade, macroeconomics enables policymakers and
analysts to identify trends, predict future economic outcomes, and formulate
policies that can support long-term economic growth and stability. The concepts
of fiscal and monetary policy, as
References
Dear students, get fully solved
assignments by professionals
Do send your query at :
or call us at : 08263069601
(Plagiarism proofed
assignments available with 100% surety and refund)
Total Marks: 100
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