Economics Answers

In the aggregate expenditures model, the size of the marginal propensity to consume (MPC) is assumed to always be…

a. equal to infinity.

b. zero.

c. greater than ten.

d. an amount greater than zero, but less than one.

e. an amount greater than ten, but more than zero.

The fundamental economic problem society is confronted with involves ___________.

a.   ensuring they get what they want

b.   ensuring the lowest possible satisfaction of needs with these scares resources

c.   choosing how it will use its scarce resources to the maximum effect in order to satisfy its needs

d.   making as much profit as possible regardless of the needs of society 

Deregulation within the airline industry was introduced in South Africa in 1991. Before deregulation, South African Airways (SAA) was the only service provider on the main domestic airline routes as well as the international airline routes. The first decade after deregulation resulted in a wave of low cost airline competitions such as Flitestar, Sun Air, Phoenix Air, Nationwide, 1time and Velvet sky entering the domestic market. 

SAA functions within a free-market economy, which is characterised by which of the following attributes?

a.   Private ownership of production factors

b.   Free competition

c.   Profit motive recognised

d.   Limited right to strike in state enterprises

1.2 Explain why nations trade using the following theories and illustrate with an example in each case.

(a) Adam Smith theory [5]

(b) David Ricardo theory

With the aid of appropriate diagram examine the income and substitution effect for an increase in price of good x.

Deregulation within the airline industry was introduced in South Africa in 1991. Before deregulation, South African Airways (SAA) was the only service provider on the main domestic airline routes as well as the international airline routes. The first decade after deregulation resulted in a wave of low cost airline competitions such as Flitestar, Sun Air, Phoenix Air, Nationwide, 1time and Velvet sky entering the domestic market. 

There are several factors in the business world that apply pressure on a modern-day organisation such as SAA. Which one of these factors is depicted in the mini-case study above?

a.   Profitability

b.   Corporate Social Investment

c.   Environmental change

d.   Consumerism

Discussion Question 2

Latin American and Caribbean citizens who migrate to the United States earn salaries there that are higher than what they were earning at home. Since the migrants have the same skills as when they lived in Jamaica, why are they apparently more productive in their new country?

After an alien invasion, Earth has to resort to the extreme protection of its resources in order to survive. A global government is elected with the mandate to control all the resources, which remain to humanity. The global government serves as a centrally directed economic system and has assumed complete responsibility for producing and distributing products and services. Which one of the following best describes the main economic system used in this new world order?

a.   The market economy

b.   The command economy

c.   Mixed economies

d.   Free-market economy

Auto Insurance and the Black Box

The chapter talks about the lack of information regarding insurance. I found an article about installing a box from your auto insurance company that monitors your driving. The idea is, if you drive less or if you are a safe driver the insurance company will reduce your insurance premiums. In fact, in most cases the box may have been a prop, however, people still were driving safer.

Covid-19 has changed a lot of Americans driving habits. If you are no longer driving to work did your insurance company reduce your rates?

The article talks about how your insurance carrier can reduce rates based on how far you drive and how safe you drive.in some cases, the companies may give you an empty box without you knowing it and you will still modify your driving. What do you think about this and how would you tie it to the chapter? Do you believe these practices are good ways to reduce insurance rates?

If resources were abundant, there will be no need to study economics. Discuss