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Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco. Eco.
Economics Summer Home Work Set 1 and 2 4/14/2013 Anjana Sharma Grade- 10y

Identify the factors of production. [4] Land: Land represents all natural resources, such as timber and gold, used in the production of a good. Labour: Labour is the human input (workers, managers etc) into the production process. Each individual has a different level of skills, qualities and qualifications. Capital: Man made physical goods used to produce other goods and services. Examples include machines, computers, tools, factories, roads etc. Enterprise: The entrepreneur provides the initial ideas. They risk their own resources in business ventures. They also organise the other 3 factors of production. Explain what is meant by the factors of production. [4] FOP: An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labour, capital and entrepreneurship. Land: it refers to the natural resources available to humans given by nature. Example: water bodies, forests, all plants and animals, etc. AKA: Natural Resources. Reward: Rent Labour: People who work with their hands and use their brains to help make goods and services for money rewards. Example: Doctor, Teacher, Factory worker, etc. AKA: Human Resources. Reward: Wages. Each individual has a different level of skills, qualities and qualifications. This is known as there HUMAN CAPITAL. Capital: It is the wealth used for the further production of wealth. All man made goods, used in the production process is known as capital. AKA: Manmade resource. Reward: interest. Increases in the level of capital are called INVESTMENT Enterprise: business knowhows or the ability to run a production process is called Enterprise. The person who runs and controls an enterprise is known as an Entrepreneur. AKA: Manmade Factor. Reward: Profit Explain the terms scarcity and opportunity cost. [4] Opportunity Cost: is the next best alternative forgone. Opportunity Cost is important in economics as it weighs the next best alternative you have gone without. Example: giving up your favourite movie to study (in order to get good grades). The opportunity cost is the movie that has been forgone. Scarcity: It is caused by unlimited wants and limited resources. These limited resources have to satisfy some wants. Therefore people have to make a choice and this choice is known as opportunity cost. Opportunity Cost is the result of scarcity of resources. Example: the demand for fresh water is unlimited, while the resources for fresh water are limited. Identify and explain which factors of production are mentioned above. [4] [Question not answerable] Explain, with the use of one example, what is meant by a natural resource of a country.[3] Natural resources of a country, such as, actual land, minerals, water bodies, flora and fauna, fossil fuels, gases and so on, are collectively called land. Example: Australia is the world's
leading coal exporter. Coal is a natural resource, and its export brings money to the country.

Explain the term opportunity cost and discuss why an increase in spending on police and armed forces may result in an opportunity cost. [4] Opportunity Cost: is the next best alternative forgone. Opportunity Cost is important in economics as it weighs the next best alternative you have gone without. Example: giving up your favourite movie to study (in order to get good grades). The opportunity cost is the movie that has been forgone. An increasing in spending on Defence may cause an opportunity as the government has a limited amount of money and it has to use it equally for public spending (which includes-

Public and merit goods, exports, infrastructure, etc.). If the government uses more on defence, the opportunity cost is that, there will be less money spent on education, healthcare, and other sectors funded by the government. Describe the main role of an entrepreneur. [2]
The term entrepreneur is commonly used to describe an individual who organizes and operates a business or businesses (to run successfully and to make a profit), taking on financial risk to do so.

Identify one project in the primary sector and one project in the secondary sector. [2] Primary sector: Cut down trees from forests Secondary sector: Process timber to make money (paper notes) Explain what is meant by industrial development. [4] Industrial development refers to the growth of an economy. When this happens the industry becomes more productive and cost effective. The industry can expand, hire more labour, increase their capital and improve their technology, spend money on research and development, hire skilled workers and managers, spend time and money on advertising , diversify etc, ; all this occurs when there is an industrial development . As a result the government might support the industry, and Consumers and producers both benefit from it. Discuss which factor of production might be most significant in the operation of a luxury hotel. [4] All Fops are important the flora and fauna, the view and location all matters, it better the natural surroundings the more customers. Labour is the most important factor the from security to the chef, everybody have to be on top behaviour and have to be specialized at their work. The more experienced the labour and the better the service, the customers will visit again and market for you. Capital is also very important for constructing the hotel, And for the maintenance. Enterprise is necessary to ensure that the hotel can expand and make profits. After studying for your Economics qualification you have to decide whether to leave school and find a job or enrol at a college for more specialised training. What factors might you consider when making your decision? [5] There are a range of factors that would have to be to be taken in to account, for deciding to study or work. One is whether there is a possibility of studying the desired subject at a higher level in an educational institution in your area. If not you may have to consider studying in another area or country or you may have to think about another way of studying, such as undertaking a correspondence course. Another factor concerns your self assessment of your performance in studies. If you think you will struggle to pass the examinations or that you may not enjoy the course, studying may not be a good use of your time. In this case, you will be giving up the opportunity to earn money and gain work experience and possibly not gain much in return. If, however you are prepared to work and think that you stand a good chance of passing the examinations, the decision to study may prove to be a good choice. Whilst you will be sacrificing some income now, your future carer prospects and earning potential are likely to be significantly higher after pursuing higher studies. You may also gain a lifelong interest in some of the subjects you study and make some good friends .so it important that you examine the job opportunities open to you given your qualifications and additional income earned with better qualifications relative to what can be earned without them. If your courses and/ or books and equipment have to be paid for. You and your family will also have to consider the financial sacrifices involved. To pay for your studies you and your family may have to go without for ex, holidays, or even some basic necessities. You may also have to undertake

part time employment, in order to finance your studies. Whether your studies have to be paid for or not your family may need your income now and to help support them, you may decide that you have to work now. This however is likely to reduce your lifetime earnings and consequently the financial help received by your family from you in the future. The key economic factors to be considered are your familys financial position, the cost of your studies and the difference made to your career, choices and earnings by the qualifications gained by you. Explain what is meant by the market economy. [4] In a totally free market economy there is no role for government and therefore no taxes or government spending. Features: Profit Motive Consumers are the kings Private sector operates Producers must produce what consumers want to earn a profit. No public/merit goods Advantages: Responds quickly to consumer wants Large range of consumer goods Encourages use of new technology Government does not have to give instructions Firms have an incentive to produce Disadvantages: Gives more importance to people with more money Ignores negative social effects of pollution Encouraged production/consumption of demerit goods No public/merit goods Factors of production are only employed if it is profitable. Explain what is meant by a market system. [5] The social network that permits interaction between buyers and sellers. It includes all the rules and regulations, the reputations and credentials of the companies and individuals involved. The market system is where market players bid and ask. Auctions, rationing, black market and free market, real estate market, stock market, etc. Distinguish between the private sector and the public sector of an economy. [3] Public Sector- Enterprises which are owned and controlled by the government. Eg: Railways, Public Transport and Parks, etc. Private Sector- Organizations and firms owned by the general Public. Eg: Apple, Epson, Nike, etc. What are the main differences between a planned economy and a market economy? [4] Planned Economies: Type of economy that gives the government total control over the allocation of resources. A planned economy alleviates the use of private enterprises and allows the government to determine everything from distribution to pricing. Planned economies basically give the government dictatorship type control over the resources of the country. Planned economies can provide stability, but also can limit the growth and advancement of the country if the government does not allocate resources to the innovative enterprises.

 Advantages: Public/Merit goods are produced Laws can be enforced against consumption of harmful goods Taxes can be charged for pollution in the process of production An equal selection of consumer goods is available to people with more/less money It is service motivated, so everything is done for the benefit of the citizens. Government can reduce employment by creating jobs. Disadvantages: No incentive to produce Very small range of consumer goods Government has to provide instructions to each and every firm. Firms produce what the government wants not what the people want. The price mechanism cannot be used Mixed Economy: The mixed economic system attempts to combine the advantages of planned and command economies and eliminate the disadvantages. A mixed economy can enforce laws against the selling of harmful goods, and impose taxes on negative effect of production A mixed economy provides many public/merit and consumer goods. A mixed economy has private firms and public corporations which operate The public sector and the private sector work hand in hand to allocate resources in the most efficient way possible. The government can create jobs to prevent unemployment. New technology can be used in firms which can afford it. The government can provide free healthcare and unemployment benefits to those who need it. Many economies are mixed economies. Discuss why most countries have decided to have a mixed economy. [10] The mixed economic system attempts to combine the advantages of planned and command economies and eliminate the disadvantages. A mixed economy can enforce laws against the selling of harmful goods, and impose taxes on negative effect of production A mixed economy provides many public/merit and consumer goods. A mixed economy has private firms and public corporations which operate The public sector and the private sector work hand in hand to allocate resources in the most efficient way possible. The government can create jobs to prevent unemployment. New technology can be used in firms which can afford it. The government can provide free healthcare and unemployment benefits to those who need it.