SSE121- TUTORIAL SEASON 1 SHEET AND ANSWERS
Q.1. what is meant be economics?
- economics is a component of social science that involves the utilization of unlimited
(scarce) resources to satisfy their human needs.
Q.2. List the three fundamentals in economics?
-what goods will be produced
-how to produce the goods and services
-who are the goods produced for
-how will the system accommdate change(adaptation)
a. what goods will be produced- meaning goods that will be produced must be goods that
add value to
the society.
b. how will the goods and services be produced- this means it depends on the quantity of
whats vailiableto to use in the production of the goods and services.
c. who are the goods been produced for- meaning they have to be an identication of
which age group to
target before the producyion of the goods.
d. how will the system accommodate change- this means that the trade off done must
bring positive value to nab demanding interest from the public.
Q.3 What is the difference between microeconomics and macroeconomics?
a. micro economics is a brunch of economics that deals with an individual unit. While
macro economics is
an aggravated unit of an economy formulated to apply at national level.
Q4. Which of the following subjects fall under microeconomics and which ones under
macroeconomics?
-Determination of wage rate in the mining sector.
a. Macro economics the reason is simply because copper is a natural reasoure that is produced by
the national unit.
-Determination of the level of employment in the economy
b.Macro economics
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How is general price level determined
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Determination of the price of maize
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How is national income determined
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What determines the rate of economic growth of a country
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Briefly explain the difference between static and dynamic economics.
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What is meant by the following terms:
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Ceteris Paribus
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Economic theory
states that the higher the price the lower the demand
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Economic model
is the mathematical calculation used to connect valuables
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opportunity cost
is the giving up of something and improving something thats better off giving you value it
simply is to trade off
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List and briefly explain the different economic systems?
command economy is a type of economy that is headed the state.
free economy is the production of goods and services by individuals using different resource's
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What do you understand of production? And list four types of factors of
production?
is the combination of differernt reasources to produce something with value.
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Clearly explain the problem of choice in economics by using the concepts of scarcity,
rationality and opportunity cost.
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Define the production possibility frontier (curve) and state the assumptions of the
PPF.
is simply a graph that shows different combinations of two goods used which can be produced
when resources used are fully utilized. oppotunity coast changes in a curved ppf graph while the
coast oppotunity cost in a straight line ppf graph is constant.
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Suppose Zed Republic can produce just two goods: maize and copper. Assume that over
a given period of time it produced the following combinations:
Production possibilities
Maize( in thousand tonnes)
Copper (in thousand tonnes)
\A
0
15
B
1
14
C
2
12
D
3
9
E
4
5
F
5
0
Q.Draw the Zed’s production possibility frontier.
Q.What shape is Zed’sPPF and what is behind the shape?
a. the shape on the graph is a straight line meaning the opotunity cost is improtant.
Q.Assume that the Zed is currently producing 3tonnes of maize and 9 tonnes of copper,
what is the opportunity cost of producing 4 tonnes of maize?
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Label points on the PPF which show the following
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Scarcity
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Efficiency
•
•
Inefficiency (unemployment)
Now assume technical progress leads to 10 percent increase in the production of
Copper for any given amount of resources. Draw the new production possibility
frontier for Zed republic.
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What do you understand by Normative and Positive economics?
a. Normative economics is the defined as an objective statement of something in relation
to economics.
b. Positive econoimics are facts about economics that are non debatable,
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Classify each of the following statements as positive or normative and explain why?
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Society faces a short-run tradeoff between inflation and unemployment.
a. positive
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The Bank of Zambia should reduce the rate of growth of money.
b. normative
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Society ought to require welfare recipients to look for jobs.
c. namative
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A reduction in the rate of growth of money will reduce the rate of inflation.
d. positive
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Lower tax rates encourage more work and more saving.-
e.positive