Nov P2 Mix
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Questions and Answers

What is one of the benefits of globalization?

  • Access to new markets and broadening of customer base (correct)
  • Environmental degradation
  • Labor market disruption in developing countries
  • Increased economic disparities between countries

    • What is the concept of comparative advantage in trade?

  • A country specializes in producing goods for which it has the lowest opportunity cost (correct)
  • A country produces goods that are not available in other countries
  • A country can produce a good at the lowest cost
  • A country trades only with its neighboring countries

    • What is the North-South Divide?

  • A socio-economic and political divide between developed and developing countries (correct)
  • A trade agreement between countries in the Northern Hemisphere
  • A cultural divide between urban and rural areas
  • A geographical divide between Eastern and Western countries

    • What is one of the environmental problems in South Africa?

    <p>Loss of biodiversity due to habitat destruction and pollution (A)</p> Signup and view all the answers

    What is a measure taken by South Africa to protect the environment?

    <p>Implementing legislation such as the National Environment Management Act (D)</p> Signup and view all the answers

    What is a consequence of globalization?

    <p>Increased inequality between and within countries (B)</p> Signup and view all the answers

    What is the result of increased industrial activity in globalization?

    <p>Environmental degradation (B)</p> Signup and view all the answers

    What is a characteristic of developed countries in the North-South Divide?

    <p>They tend to export high-value manufactured goods (A)</p> Signup and view all the answers

    What is one of the challenges to sustainable development in South Africa?

    <p>Climate change (D)</p> Signup and view all the answers

    What is a benefit of trade in globalization?

    <p>Promotes efficiency and specialization, leading to lower prices and more varied products (C)</p> Signup and view all the answers

    What is the main difference between accounting profit and economic profit?

    <p>Economic profit takes into account opportunity costs, while accounting profit does not (D)</p> Signup and view all the answers

    What is the break-even point in a business?

    <p>The point where the business makes a normal profit (C)</p> Signup and view all the answers

    What is the definition of fixed costs?

    <p>Costs that do not vary with the level of output (D)</p> Signup and view all the answers

    What is the formula for calculating average total cost?

    <p>TC divided by Q (A)</p> Signup and view all the answers

    What occurs when increasing the scale of production leads to a lower cost per unit?

    <p>Economies of scale (B)</p> Signup and view all the answers

    What is the definition of total revenue?

    <p>The total income from sales, calculated as Price x Quantity (B)</p> Signup and view all the answers

    What is the definition of marginal revenue?

    <p>The additional income from selling one more unit (D)</p> Signup and view all the answers

    What is the formula for calculating profit?

    <p>TR - TC (C)</p> Signup and view all the answers

    What is the main concept that describes how the quantity demanded or supplied of a product changes in response to a price change?

    <p>Price elasticity (B)</p> Signup and view all the answers

    What is the purpose of understanding cost, revenue, and profitability?

    <p>To understand market behavior and guide business decisions (B)</p> Signup and view all the answers

    What is one of the initiatives to reduce emissions?

    <p>Improving public transport (A)</p> Signup and view all the answers

    What is the primary objective of most businesses?

    <p>Profit maximization (A)</p> Signup and view all the answers

    What is the relationship between higher prices and supply?

    <p>Higher prices encourage increased production and supply (C)</p> Signup and view all the answers

    What is price elasticity of demand?

    <p>A measure of how the quantity demanded of a good responds to a change in the price of that good (A)</p> Signup and view all the answers

    What is elastic demand?

    <p>When the elasticity is greater than 1 (B)</p> Signup and view all the answers

    What is the result of an increase in the price of a good on its demand?

    <p>Demand typically decreases unless the good is inelastic (B)</p> Signup and view all the answers

    What is the purpose of relative prices?

    <p>To compare the cost of one good or service in terms of another (A)</p> Signup and view all the answers

    What is the effect of more substitutes on price elasticity of demand?

    <p>It makes demand more elastic (A)</p> Signup and view all the answers

    What is price elasticity of supply?

    <p>A measure of the responsiveness of quantity supplied to a change in price (D)</p> Signup and view all the answers

    What is the effect of an increase in the price of one good on its substitute?

    <p>Demand for the substitute increases (D)</p> Signup and view all the answers

    What is the effect of production capacity on price elasticity of supply?

    <p>It makes supply more elastic (D)</p> Signup and view all the answers

    What is the impact of overgrazing and improper land use on the environment?

    <p>It exacerbates land degradation (D)</p> Signup and view all the answers

    What is the purpose of the National Strategy for Sustainable Development?

    <p>To integrate sustainable practices into various sectors of the economy (A)</p> Signup and view all the answers

    What is cross elasticity of demand?

    <p>A measure of how the quantity demanded of one good responds to the price change of another good (C)</p> Signup and view all the answers

    What is an example of a complementary good?

    <p>Cars and fuel (A)</p> Signup and view all the answers

    What is the result of a decrease in the price of one good on its complement?

    <p>Demand for the complement increases (A)</p> Signup and view all the answers

    What is the relationship between the cost of production and the profitability of a firm?

    <p>Higher production costs lead to lower profitability (B)</p> Signup and view all the answers

    What is income elasticity of demand?

    <p>A measure of how the quantity demanded of a good responds to changes in consumer income (B)</p> Signup and view all the answers

    What is an example of a normal good?

    <p>Quality clothing (B)</p> Signup and view all the answers

    What is the significance of understanding elasticities in business decision-making?

    <p>It helps in both setting prices that optimize revenue and planning production levels (A)</p> Signup and view all the answers

    What is the primary definition of globalization?

    <p>The process by which businesses or other organizations develop international influence or start operating on an international scale (C)</p> Signup and view all the answers

    Which of the following is a cause of globalization?

    <p>Technological Advances (D)</p> Signup and view all the answers

    What is an effect of globalization on economic systems?

    <p>Economic Growth (D)</p> Signup and view all the answers

    What is a characteristic of globalization?

    <p>Economic Integration (C)</p> Signup and view all the answers

    Which of the following is a result of multinational corporations?

    <p>Exploiting geographic advantages (D)</p> Signup and view all the answers

    What is a result of trade liberalization?

    <p>Reduction of trade barriers (C)</p> Signup and view all the answers

    What is an aspect of cultural exchange in globalization?

    <p>Increased global relationships leading to an exchange of cultural ideas and practices (B)</p> Signup and view all the answers

    What is a result of technological convergence in globalization?

    <p>Rapid advancements in technology leading to innovation (B)</p> Signup and view all the answers

    What is the main feature of economic integration in globalization?

    <p>Reduction of trade barriers and standardization of laws (A)</p> Signup and view all the answers

    What drives the cultural exchange aspect of globalization?

    <p>Increased global relationships and exchange of cultural ideas (C)</p> Signup and view all the answers

    What is a result of the free movement of capital in globalization?

    <p>Businesses can invest globally (D)</p> Signup and view all the answers

    What is a characteristic of multinational corporations in globalization?

    <p>Exploit geographic advantages such as lower labor costs (D)</p> Signup and view all the answers

    What is an effect of technological convergence in globalization?

    <p>The cost of operations is lowered (D)</p> Signup and view all the answers

    What is a cause of globalization?

    <p>Improvements in communication and transport technologies (D)</p> Signup and view all the answers

    What is an advantage of globalization?

    <p>Increased investment and business opportunities (A)</p> Signup and view all the answers

    What is the definition of globalization?

    <p>The process by which businesses or other organizations develop international influence or start operating on an international scale (B)</p> Signup and view all the answers

    What is the formula for calculating price elasticity of demand?

    <p>Percentage change in quantity demanded divided by percentage change in price (D)</p> Signup and view all the answers

    What is the characteristic of a good with an elastic demand?

    <p>Small price change causes a significant change in quantity demanded (C)</p> Signup and view all the answers

    What is the effect of an increase in the availability of substitutes on price elasticity of demand?

    <p>It makes demand more elastic (A)</p> Signup and view all the answers

    What is the definition of inelastic supply?

    <p>Quantity supplied is relatively insensitive to price changes (D)</p> Signup and view all the answers

    What is the effect of an increase in the time period on price elasticity of demand?

    <p>It makes demand more elastic (B)</p> Signup and view all the answers

    What is the definition of cross elasticity of demand?

    <p>Measures how the quantity demanded of one good responds to a change in the price of another good (D)</p> Signup and view all the answers

    What is the characteristic of a normal good?

    <p>Has a positive income elasticity of demand (B)</p> Signup and view all the answers

    What is the purpose of understanding price elasticity of supply?

    <p>To determine the optimal production level of a good (A)</p> Signup and view all the answers

    What is the effect of an increase in production capacity on price elasticity of supply?

    <p>It makes supply more elastic (A)</p> Signup and view all the answers

    What is a consequence of increased industrial activity in globalization?

    <p>Environmental degradation (C)</p> Signup and view all the answers

    What is the primary goal of the measures taken by South Africa to protect the environment?

    <p>Combat environmental degradation (C)</p> Signup and view all the answers

    What is the significance of understanding elasticities in business decision-making?

    <p>It helps in making informed decisions regarding pricing strategies and production levels (D)</p> Signup and view all the answers

    What is a characteristic of the North-South Divide?

    <p>Significant income gap between developed and developing countries (C)</p> Signup and view all the answers

    What is a benefit of trade in globalization?

    <p>Promotes efficiency and specialization (A)</p> Signup and view all the answers

    What is a challenge to sustainable development in South Africa?

    <p>Climate change (A)</p> Signup and view all the answers

    What is a result of labor market disruption in globalization?

    <p>Job losses in developed countries (A)</p> Signup and view all the answers

    What is the purpose of understanding the dynamics of globalization?

    <p>To develop effective strategies to manage the effects of globalization (C)</p> Signup and view all the answers

    What is a characteristic of developed countries in the North-South Divide?

    <p>High-value manufactured goods (C)</p> Signup and view all the answers

    What is an impact of trade on consumers?

    <p>Lower prices and more varied products (B)</p> Signup and view all the answers

    What is a consequence of outsourcing jobs to regions with cheaper labor?

    <p>Job losses in developed countries (D)</p> Signup and view all the answers

    What is the primary objective of most businesses?

    <p>Profit maximization (D)</p> Signup and view all the answers

    How does an increase in the price of one good affect its demand?

    <p>Decreases demand unless the good is inelastic (D)</p> Signup and view all the answers

    What is the result of an increase in the price of a good on its substitute?

    <p>Increases demand for the substitute (A)</p> Signup and view all the answers

    What is the purpose of relative prices in economics?

    <p>To compare the cost of one good or service in terms of another (A)</p> Signup and view all the answers

    What is the impact of overgrazing and improper land use on the environment?

    <p>Exacerbates land degradation (C)</p> Signup and view all the answers

    What is the primary focus of the National Strategy for Sustainable Development?

    <p>Integrating sustainable practices into various sectors of the economy (C)</p> Signup and view all the answers

    What is the relationship between the cost of production and the profitability of a firm?

    <p>Lower production costs lead to increased profitability (C)</p> Signup and view all the answers

    What is the effect of an increase in the price of one good on its complement?

    <p>Decreases demand for the complement (C)</p> Signup and view all the answers

    What is the result of an increase in the scale of production?

    <p>Lower cost per unit (B)</p> Signup and view all the answers

    What is the purpose of understanding the relationships between markets in economics?

    <p>To analyze how changes in one market affect others (C)</p> Signup and view all the answers

    What is the main difference between accounting profit and economic profit?

    <p>Accounting profit does not account for implicit costs, while economic profit does. (C)</p> Signup and view all the answers

    What is the purpose of calculating marginal cost?

    <p>To make decisions about production levels. (D)</p> Signup and view all the answers

    What occurs when a firm experiences economies of scale?

    <p>The cost per unit decreases. (D)</p> Signup and view all the answers

    What is the formula for calculating total revenue?

    <p>Price x Quantity (A)</p> Signup and view all the answers

    What is the definition of normal profit?

    <p>The minimum profit needed for a firm to continue operating. (A)</p> Signup and view all the answers

    What is the relationship between marginal revenue and the optimal level of output?

    <p>Marginal revenue is crucial for determining the optimal level of output. (A)</p> Signup and view all the answers

    What is the definition of fixed costs?

    <p>Costs that do not vary with the level of production. (C)</p> Signup and view all the answers

    What is the definition of long run costs?

    <p>Costs that become variable in the long run. (D)</p> Signup and view all the answers

    What is the impact of an increase in the price of a good on its demand?

    <p>The demand decreases. (D)</p> Signup and view all the answers

    What is the purpose of understanding cost, revenue, and profitability?

    <p>To make informed decisions about production and pricing strategies. (C)</p> Signup and view all the answers

    What is the primary driver of the free movement of resources across borders in globalization?

    <p>Capital movement (A)</p> Signup and view all the answers

    What is a result of the integration of economic activities in globalization?

    <p>Economic growth (C)</p> Signup and view all the answers

    What is a characteristic of multinational corporations in globalization?

    <p>Exploiting geographic advantages (C)</p> Signup and view all the answers

    What is a result of technological convergence in globalization?

    <p>Lowering the cost of operations (C)</p> Signup and view all the answers

    What is an aspect of cultural exchange in globalization?

    <p>Exchange of cultural ideas and practices (B)</p> Signup and view all the answers

    What is a main feature of economic integration in globalization?

    <p>Standardization of laws and regulations (B)</p> Signup and view all the answers

    What is a result of trade liberalization in globalization?

    <p>Encouragement of international trade and investment (C)</p> Signup and view all the answers

    What is a characteristic of globalization that facilitates international business operations?

    <p>Standardization of laws and regulations (A)</p> Signup and view all the answers

    What is a major concern related to the increased economic disparities between developed and developing countries in the context of globalization?

    <p>Widening of the income gap (C)</p> Signup and view all the answers

    What is the primary goal of the measures taken by South Africa to combat environmental degradation?

    <p>To promote sustainable development (C)</p> Signup and view all the answers

    What is a consequence of the outsourcing of jobs from developed countries to regions with cheaper labor?

    <p>Job losses in developed countries (C)</p> Signup and view all the answers

    What is the concept of absolute advantage in trade?

    <p>A country can produce a good more efficiently than other countries (B)</p> Signup and view all the answers

    What is the primary impact of globalization on the world's economic, social, and cultural landscapes?

    <p>It has a complex and multifaceted impact (A)</p> Signup and view all the answers

    What is the primary characteristic of the North-South Divide?

    <p>Economic disparities between developed and developing countries (C)</p> Signup and view all the answers

    What is the primary goal of sustainable environmental management?

    <p>To maintain natural resources for future generations (B)</p> Signup and view all the answers

    What is the result of the increased industrial activity in globalization?

    <p>Environmental degradation (B)</p> Signup and view all the answers

    Which of the following is a factor that influences demand?

    <p>Price expectations (A)</p> Signup and view all the answers

    What is the primary benefit of trade in globalization?

    <p>Promotion of efficiency and specialization (B)</p> Signup and view all the answers

    What is the purpose of understanding relative prices?

    <p>To compare the cost of one good or service in terms of another (C)</p> Signup and view all the answers

    What is a major challenge to sustainable development in South Africa?

    <p>All of the above (D)</p> Signup and view all the answers

    What is the primary purpose of the measures taken by South Africa to protect the environment?

    <p>To ensure sustainable development (C)</p> Signup and view all the answers

    What is the result of an increase in the price of a good on its substitute?

    <p>An increase in demand for the substitute (D)</p> Signup and view all the answers

    What is the objective of the National Strategy for Sustainable Development?

    <p>To integrate sustainable practices into various sectors of the economy (A)</p> Signup and view all the answers

    What is the relationship between higher prices and supply?

    <p>Higher prices lead to an increase in supply (B)</p> Signup and view all the answers

    What is the impact of overgrazing and improper land use on the environment?

    <p>It leads to land degradation and exacerbates environmental deterioration (B)</p> Signup and view all the answers

    What is the primary objective of most businesses?

    <p>To maximize profits (C)</p> Signup and view all the answers

    What is the result of an increase in the production capacity of a firm?

    <p>A decrease in the cost per unit (C)</p> Signup and view all the answers

    What is the effect of an increase in the price of a good on its demand?

    <p>A decrease in demand (C)</p> Signup and view all the answers

    What does the price elasticity of demand measure?

    <p>How much the quantity demanded of a good responds to a change in the price of that good (D)</p> Signup and view all the answers

    Which of the following factors can make demand more elastic?

    <p>Increase in the proportion of income spent on a good (D)</p> Signup and view all the answers

    What is the characteristic of elastic supply?

    <p>Suppliers can increase output without a significant rise in cost (D)</p> Signup and view all the answers

    What does cross elasticity of demand measure?

    <p>How the quantity demanded of one good responds to the price change of another good (B)</p> Signup and view all the answers

    What is an example of a normal good?

    <p>Quality clothing (B)</p> Signup and view all the answers

    What is the purpose of understanding elasticities in business decision-making?

    <p>To make more informed decisions regarding pricing strategies and production adjustments (A)</p> Signup and view all the answers

    Which of the following makes supply more elastic?

    <p>Increase in time to respond (A)</p> Signup and view all the answers

    What is the effect of more substitutes on price elasticity of demand?

    <p>It makes demand more elastic (D)</p> Signup and view all the answers

    What is the effect of an increase in the price of one good on its complement?

    <p>The demand for the complement decreases (B)</p> Signup and view all the answers

    Why is understanding price elasticity of demand important for businesses?

    <p>To set prices that optimize revenue (C)</p> Signup and view all the answers

    What is the main difference between accounting profit and economic profit?

    <p>Accounting profit is calculated by subtracting explicit costs from total revenue, whereas economic profit also includes opportunity costs. (A)</p> Signup and view all the answers

    What is the purpose of calculating marginal cost?

    <p>To decide the optimal level of output for a business. (A)</p> Signup and view all the answers

    What occurs when a firm experiences increasing returns to scale?

    <p>Output increases by a greater proportion than inputs. (A)</p> Signup and view all the answers

    What is the formula for calculating total revenue?

    <p>Price x Quantity (D)</p> Signup and view all the answers

    What is the purpose of understanding economies of scale?

    <p>To reduce the cost per unit of production. (A)</p> Signup and view all the answers

    What is the definition of normal profit?

    <p>The break-even point where a business makes just enough profit to continue operating. (B)</p> Signup and view all the answers

    What is the purpose of calculating average total cost?

    <p>To determine the most efficient production level. (C)</p> Signup and view all the answers

    What is the effect of an increase in the price of a good on its demand?

    <p>The demand decreases. (B)</p> Signup and view all the answers

    What is the purpose of understanding price elasticity of demand?

    <p>To make informed decisions about pricing and production strategies. (D)</p> Signup and view all the answers

    What is the main concept that describes how the quantity supplied of a product changes in response to a price change?

    <p>Price elasticity of supply. (D)</p> Signup and view all the answers

    What is a key strategy in reducing environmental impact in South Africa?

    <p>Encouraging the use of recycled materials (B)</p> Signup and view all the answers

    What is the primary objective of most businesses in the economic framework?

    <p>Maximizing profit (C)</p> Signup and view all the answers

    How does an increase in the price of a good affect its demand?

    <p>Demand decreases (A)</p> Signup and view all the answers

    What is the result of an increase in the price of one good on its substitute?

    <p>Demand for the substitute increases (D)</p> Signup and view all the answers

    What is the purpose of relative prices in economics?

    <p>To compare the cost of one good or service in terms of another (D)</p> Signup and view all the answers

    What is the impact of overgrazing and improper land use on the environment?

    <p>It exacerbates land degradation (B)</p> Signup and view all the answers

    What is the primary focus of the National Strategy for Sustainable Development?

    <p>To integrate sustainable practices into various sectors of the economy (D)</p> Signup and view all the answers

    What is the relationship between higher prices and supply?

    <p>Higher prices increase supply (C)</p> Signup and view all the answers

    What is the effect of an increase in the price of one good on its complement?

    <p>Demand for the complement decreases (D)</p> Signup and view all the answers

    What is the purpose of understanding cost, revenue, and profitability in a business?

    <p>To make informed decisions about production and pricing (A)</p> Signup and view all the answers

    What does the price elasticity of demand measure?

    <p>How much the quantity demanded responds to a change in price (B)</p> Signup and view all the answers

    What is the characteristic of elastic demand?

    <p>A small price change causes a significant change in quantity demanded (C)</p> Signup and view all the answers

    What is the factor that affects price elasticity of demand, making demand more elastic?

    <p>Availability of substitutes (D)</p> Signup and view all the answers

    What is the primary driver of the economic integration aspect of globalization?

    <p>Removal of trade barriers (B)</p> Signup and view all the answers

    What is the primary effect of multinational corporations on globalization?

    <p>Exploitation of geographic advantages (B)</p> Signup and view all the answers

    What is the characteristic of inelastic supply?

    <p>The capacity to increase production is limited (B)</p> Signup and view all the answers

    What is the type of elasticity that measures how the quantity demanded of one good responds to the price change of another good?

    <p>Cross elasticity of demand (B)</p> Signup and view all the answers

    What is the primary outcome of trade liberalization in globalization?

    <p>Increased investment and business opportunities (B)</p> Signup and view all the answers

    What is the characteristic of inferior goods?

    <p>Negative income elasticity (B)</p> Signup and view all the answers

    What is the primary characteristic of cultural exchange in globalization?

    <p>Increased global relationships (A)</p> Signup and view all the answers

    What is a consequence of cultural erosion in globalization?

    <p>Dominance of foreign cultures (D)</p> Signup and view all the answers

    What is the primary effect of technological convergence on globalization?

    <p>Rapid advancements in technology (C)</p> Signup and view all the answers

    What is the primary objective of implementing environmental impact assessments in South Africa?

    <p>To minimize environmental degradation (A)</p> Signup and view all the answers

    What is the benefit of understanding price elasticity of demand in business decision-making?

    <p>To set prices that optimize revenue (B)</p> Signup and view all the answers

    What is the primary drive of capital movement in globalization?

    <p>The unrestricted flow of capital (B)</p> Signup and view all the answers

    What does the time period affect in terms of price elasticity of demand?

    <p>The responsiveness of demand to price changes (C)</p> Signup and view all the answers

    What is a result of labor market disruption in globalization?

    <p>Job losses in developed countries due to outsourcing (C)</p> Signup and view all the answers

    What is the factor that affects price elasticity of supply, making supply more elastic?

    <p>All of the above (D)</p> Signup and view all the answers

    What is the primary outcome of economic integration in globalization?

    <p>Standardization of laws and regulations (A)</p> Signup and view all the answers

    What is the primary difference between accounting profit and economic profit?

    <p>Accounting profit excludes opportunity costs, while economic profit includes them. (D)</p> Signup and view all the answers

    What is the primary purpose of the National Environment Management Act in South Africa?

    <p>To regulate environmental impact assessments (A)</p> Signup and view all the answers

    What is the purpose of understanding elasticities in business decision-making?

    <p>To make informed decisions regarding pricing, production, and policy (B)</p> Signup and view all the answers

    What is the purpose of calculating average fixed cost (AFC) in a business?

    <p>To evaluate the efficiency of fixed costs. (D)</p> Signup and view all the answers

    What is the primary advantage of globalization?

    <p>Increased investment and business opportunities (C)</p> Signup and view all the answers

    What is a characteristic of the North-South Divide?

    <p>Significant income gap between developed and developing countries (D)</p> Signup and view all the answers

    What is a result of absolute advantage in trade?

    <p>Efficient production of goods due to low production costs (C)</p> Signup and view all the answers

    What is the result of increasing returns to scale in a business?

    <p>Output increases by a greater proportion than inputs. (A)</p> Signup and view all the answers

    What is the definition of marginal revenue (MR) in a business?

    <p>The additional income from selling one more unit. (B)</p> Signup and view all the answers

    What is the primary purpose of trade liberalization in globalization?

    <p>To increase trade between countries (B)</p> Signup and view all the answers

    What is the primary purpose of understanding cost, revenue, and profitability in a business?

    <p>To maximize profits and sustainably grow in competitive environments. (D)</p> Signup and view all the answers

    What is a consequence of overpopulation in South Africa?

    <p>Increased resource depletion (A)</p> Signup and view all the answers

    What is the primary benefit of innovation in globalization?

    <p>Improved product quality and variety (A)</p> Signup and view all the answers

    What is the definition of normal profit in a business?

    <p>The minimum profit needed for sustainability. (D)</p> Signup and view all the answers

    What is the effect of decreasing returns to scale on a business?

    <p>Output increases by a smaller proportion than inputs. (A)</p> Signup and view all the answers

    What is a characteristic of developed countries in the North-South Divide?

    <p>Exporting high-value manufactured goods (B)</p> Signup and view all the answers

    What is the purpose of calculating marginal cost (MC) in a business?

    <p>To make decisions about production levels and resource allocation. (D)</p> Signup and view all the answers

    What is the difference between total revenue (TR) and marginal revenue (MR) in a business?

    <p>TR is the total income from sales, while MR is the additional income from selling one more unit. (D)</p> Signup and view all the answers

    What is the primary factor that influences the long-run cost structure of a business?

    <p>The scale of production. (A)</p> Signup and view all the answers

    What is the primary difference between accounting profit and economic profit?

    <p>Accounting profit is only concerned with explicit costs, whereas economic profit takes into account both explicit and implicit costs. (B)</p> Signup and view all the answers

    What is the significance of the break-even point in a business?

    <p>It is the minimum level of output required for sustainability. (B)</p> Signup and view all the answers

    What is the impact of economies of scale on a firm's cost structure?

    <p>It results in a decrease in average variable costs. (C)</p> Signup and view all the answers

    What is the relationship between marginal revenue and the optimal level of output?

    <p>The optimal level of output is where marginal revenue equals marginal cost. (B)</p> Signup and view all the answers

    What is the purpose of understanding revenue changes in a business?

    <p>To make informed decisions on production and pricing strategies. (A)</p> Signup and view all the answers

    What is the significance of understanding cost structures in a business?

    <p>It enables businesses to make informed decisions on pricing strategies. (D)</p> Signup and view all the answers

    What is the relationship between returns to scale and economies of scale?

    <p>Returns to scale are a result of economies of scale. (B)</p> Signup and view all the answers

    What is the significance of marginal cost in decision-making?

    <p>It is used to determine the optimal level of output. (B)</p> Signup and view all the answers

    What is the purpose of understanding profitability in a business?

    <p>To make informed decisions on production, pricing, and investment strategies. (D)</p> Signup and view all the answers

    What is the significance of understanding the dynamics of cost, revenue, and profitability?

    <p>It enables businesses to maximize profits and achieve sustainability. (C)</p> Signup and view all the answers

    What is the primary driver of the removal of trade barriers in globalization?

    <p>Trade Liberalization (C)</p> Signup and view all the answers

    Which of the following is a consequence of the standardization of laws and regulations in globalization?

    <p>Facilitation of international business operations (B)</p> Signup and view all the answers

    What is the primary outcome of the integration of economic activities in globalization?

    <p>Economic growth (A)</p> Signup and view all the answers

    Which of the following is a characteristic of multinational corporations in globalization?

    <p>Exploiting geographic advantages (A)</p> Signup and view all the answers

    What is the primary outcome of technological convergence in globalization?

    <p>Lowering the cost of operations (B)</p> Signup and view all the answers

    Which of the following is a cause of cultural exchange in globalization?

    <p>Increased global relationships (D)</p> Signup and view all the answers

    What is the primary feature of economic integration in globalization?

    <p>Removal of trade barriers (A)</p> Signup and view all the answers

    Which of the following is a consequence of the free movement of resources across borders in globalization?

    <p>Economic growth (B)</p> Signup and view all the answers

    If the price elasticity of demand for a good is 0.5, what can be concluded about the demand for the good?

    <p>The demand is inelastic and a large price change will be required to lead to a small change in quantity demanded. (A)</p> Signup and view all the answers

    A firm finds that the cross elasticity of demand between its product and a complementary good is -2. What can be concluded about the demand for its product?

    <p>A decrease in the price of the complementary good will lead to an increase in the demand for the firm's product. (D)</p> Signup and view all the answers

    If the income elasticity of demand for a good is -1, what can be concluded about the good?

    <p>It is an inferior good and the demand decreases as income increases. (C)</p> Signup and view all the answers

    What is the main reason why a firm would want to know the price elasticity of supply?

    <p>To determine the optimal quantity to produce and supply. (D)</p> Signup and view all the answers

    If the price elasticity of demand for a good is 2, what can be concluded about the demand for the good?

    <p>The demand is highly elastic and a small price change will lead to a large change in quantity demanded. (C)</p> Signup and view all the answers

    What is the main difference between the price elasticity of demand and the cross elasticity of demand?

    <p>The price elasticity of demand measures the responsiveness of quantity demanded to a change in price, while the cross elasticity of demand measures the responsiveness of quantity demanded to a change in the price of another good. (B)</p> Signup and view all the answers

    A firm finds that the price elasticity of supply is 3. What can be concluded about the firm's production capacity?

    <p>The firm has a highly elastic production capacity and is able to increase supply significantly in response to a price increase. (D)</p> Signup and view all the answers

    What is the main reason why policymakers would want to know the cross elasticity of demand between two goods?

    <p>To predict how a change in the price of one good will affect the demand for the other good. (B)</p> Signup and view all the answers

    If the income elasticity of demand for a good is 1.5, what can be concluded about the good?

    <p>It is a luxury good and the demand increases as income increases, at a proportionally greater rate. (C)</p> Signup and view all the answers

    What is the main reason why businesses would want to know the income elasticity of demand for their product?

    <p>To predict how changes in consumer income will affect the demand for their product. (A)</p> Signup and view all the answers

    What is the primary goal of the National Strategy for Sustainable Development?

    <p>To integrate sustainable practices into various sectors of the economy (B)</p> Signup and view all the answers

    Which of the following is an initiative to reduce emissions?

    <p>Improving public transport (D)</p> Signup and view all the answers

    What is the effect of an increase in the price of a good on its demand, assuming the good is not inelastic?

    <p>The demand decreases (A)</p> Signup and view all the answers

    What is the primary objective of most businesses?

    <p>Profit maximization (C)</p> Signup and view all the answers

    What is the relationship between higher prices and supply?

    <p>Higher prices increase supply (C)</p> Signup and view all the answers

    What is the effect of an increase in the price of one good on its substitute?

    <p>The demand for the substitute increases (A)</p> Signup and view all the answers

    What is the purpose of relative prices?

    <p>To compare the cost of one good or service in terms of another (C)</p> Signup and view all the answers

    What is the effect of overgrazing and improper land use on the environment?

    <p>It exacerbates land degradation (A)</p> Signup and view all the answers

    What is the relationship between cost, revenue, and profitability?

    <p>Cost and revenue are directly related, and profitability is the difference between the two (B)</p> Signup and view all the answers

    What is the primary objective of understanding demand and supply relationships?

    <p>To predict the impact of changes in one market on others (D)</p> Signup and view all the answers

    Which of the following is a consequence of the North-South Divide?

    <p>Widening income gap between developed and developing countries (C)</p> Signup and view all the answers

    What is the primary objective of the measures taken by South Africa to protect the environment?

    <p>To reduce the country's reliance on non-renewable energy sources (A)</p> Signup and view all the answers

    Which of the following is a result of the cultural erosion aspect of globalization?

    <p>Overshadowing of local cultures by dominant foreign cultures (C)</p> Signup and view all the answers

    What is the primary reason for the Labour Market Disruption consequence of globalization?

    <p>Outsourcing of jobs to regions with cheaper labour (B)</p> Signup and view all the answers

    Which of the following is a characteristic of developed countries in the North-South Divide?

    <p>Exportation of high-value manufactured goods (D)</p> Signup and view all the answers

    What is the primary consequence of the environmental deterioration in South Africa?

    <p>Threat to public health (A)</p> Signup and view all the answers

    Which of the following is a result of the innovation aspect of globalization?

    <p>Increased competition leading to better products and services (C)</p> Signup and view all the answers

    What is the primary reason for the Environmental Impact consequence of globalization?

    <p>Increased industrial activity leading to environmental degradation (A)</p> Signup and view all the answers

    Which of the following is a characteristic of globalization?

    <p>Drives competition and innovation leading to better products and services (A)</p> Signup and view all the answers

    What is the primary objective of the National Environment Management Act in South Africa?

    <p>To require environmental impact assessments for new developments (D)</p> Signup and view all the answers

    What is the primary difference between accounting profit and economic profit?

    <p>Economic profit takes into account opportunity costs, while accounting profit does not. (B)</p> Signup and view all the answers

    What is the relationship between average fixed cost and quantity of output?

    <p>Average fixed cost decreases as quantity of output increases. (D)</p> Signup and view all the answers

    What is the effect of increasing returns to scale on a firm's production?

    <p>Firms will produce more to take advantage of lower costs. (A)</p> Signup and view all the answers

    What is the purpose of calculating marginal revenue?

    <p>To determine the profit-maximizing level of output. (B)</p> Signup and view all the answers

    What is the effect of a decrease in price on the demand for a good with elastic demand?

    <p>Demand increases significantly. (D)</p> Signup and view all the answers

    What is the relationship between marginal cost and the profitability of a firm?

    <p>Marginal cost is equal to average total cost at the profit-maximizing level of output. (D)</p> Signup and view all the answers

    What is the effect of an increase in the price of a substitute good on the demand for a related good?

    <p>Demand for the related good decreases. (B)</p> Signup and view all the answers

    What is the purpose of calculating average variable cost?

    <p>To identify opportunities for cost reduction. (B)</p> Signup and view all the answers

    What is the effect of economies of scale on a firm's production?

    <p>Firms will produce more to take advantage of lower costs. (C)</p> Signup and view all the answers

    What is the relationship between total revenue and marginal revenue?

    <p>Total revenue is always higher than marginal revenue. (D)</p> Signup and view all the answers

    What is the primary driver of capital movement in globalization?

    <p>Removal of trade barriers (B)</p> Signup and view all the answers

    Which of the following is a characteristic of cultural exchange in globalization?

    <p>Influence of local cultures on global lifestyles (A)</p> Signup and view all the answers

    What is the primary consequence of technological convergence in globalization?

    <p>Lowering of the cost of operations and fostering innovation (B)</p> Signup and view all the answers

    What is the primary effect of economic integration on international business operations?

    <p>Standardization of laws and regulations (A)</p> Signup and view all the answers

    What is the primary driver of multinational corporations in globalization?

    <p>Geographic advantages (C)</p> Signup and view all the answers

    What is the primary effect of trade liberalization on international trade?

    <p>Encouragement of international trade and investment (D)</p> Signup and view all the answers

    What is the primary characteristic of economic growth in globalization?

    <p>Increased business opportunities and economic development (A)</p> Signup and view all the answers

    What is the primary consequence of the increasing integration of economic systems in globalization?

    <p>Making the world more interconnected (B)</p> Signup and view all the answers

    Which of the following is a potential consequence of the inequality resulting from globalization?

    <p>Widening of the income gap between developed and developing countries (C)</p> Signup and view all the answers

    What is the primary purpose of understanding the concept of absolute advantage in trade?

    <p>To identify opportunities for economic growth and specialization (C)</p> Signup and view all the answers

    Which of the following is a challenge to sustainable development in South Africa?

    <p>Insufficient implementation of environmental impact assessments (C)</p> Signup and view all the answers

    What is the primary purpose of the National Environment Management Act in South Africa?

    <p>To reduce environmental degradation through penalties and incentives (C)</p> Signup and view all the answers

    Which of the following is a characteristic of the North-South Divide?

    <p>There is a significant income gap between developed and developing countries (B)</p> Signup and view all the answers

    What is the primary effect of outsourcing jobs to regions with cheaper labor in globalization?

    <p>Job losses in developed countries (D)</p> Signup and view all the answers

    Which of the following is a benefit of globalization?

    <p>Access to new markets and broadening of the customer base (C)</p> Signup and view all the answers

    What is the primary purpose of understanding the concept of comparative advantage in trade?

    <p>To identify opportunities for economic growth and specialization (B)</p> Signup and view all the answers

    Which of the following is a consequence of the environmental impact of globalization?

    <p>Environmental degradation and loss of ecosystems (C)</p> Signup and view all the answers

    What is the primary purpose of the National Strategy for Sustainable Development in South Africa?

    <p>To reduce environmental degradation and promote sustainable development (A)</p> Signup and view all the answers

    What is the primary purpose of implementing economic measures to reduce environmental impact?

    <p>To promote sustainable development (D)</p> Signup and view all the answers

    How does the Law of Supply affect the production decisions of firms?

    <p>Higher prices encourage increased production and supply (B)</p> Signup and view all the answers

    What is the result of a decrease in the price of a complement good on the demand for the original good?

    <p>An increase in demand for the original good (A)</p> Signup and view all the answers

    How does the National Strategy for Sustainable Development aim to promote sustainable practices in South Africa?

    <p>By integrating sustainable practices into various sectors of the economy (B)</p> Signup and view all the answers

    What is the primary objective of most businesses in the economic framework?

    <p>Profit maximization (B)</p> Signup and view all the answers

    What is the effect of an increase in the price of a good on its substitute?

    <p>An increase in demand for the substitute (A)</p> Signup and view all the answers

    How does understanding relative prices influence consumer and producer decisions?

    <p>It affects resource allocation in the economy (D)</p> Signup and view all the answers

    What is the result of an increase in the scale of production on the cost per unit?

    <p>A decrease in the cost per unit (C)</p> Signup and view all the answers

    What is the primary purpose of promoting eco-tourism and green projects in South Africa?

    <p>To promote sustainable development (A)</p> Signup and view all the answers

    What is the effect of an increase in the price of a good on its demand, assuming the good is inelastic?

    <p>A slight decrease in demand (B)</p> Signup and view all the answers

    A 10% increase in the price of a good results in a 20% decrease in quantity demanded. What can be inferred about the price elasticity of demand?

    <p>It is elastic. (D)</p> Signup and view all the answers

    Which of the following factors tends to increase the price elasticity of supply?

    <p>High mobility of resources. (A)</p> Signup and view all the answers

    What is the likely response of the quantity demanded of a normal good to a 10% increase in consumer income?

    <p>It will increase by 5%. (A)</p> Signup and view all the answers

    What is the primary purpose of understanding price elasticity of demand in business decision-making?

    <p>To set the optimal price to maximize revenue. (A)</p> Signup and view all the answers

    Which of the following goods is likely to have an inelastic demand?

    <p>Medicine. (B)</p> Signup and view all the answers

    What is the likely response of the quantity supplied of a good to a 10% increase in its price, if the price elasticity of supply is 0.5?

    <p>It will increase by 5%. (B)</p> Signup and view all the answers

    What is the relationship between the cross elasticity of demand and the price of a complementary good?

    <p>A decrease in the price of the complementary good will decrease the cross elasticity of demand. (B)</p> Signup and view all the answers

    Which of the following factors tends to decrease the price elasticity of demand?

    <p>Necessity of the good. (B)</p> Signup and view all the answers

    What is the primary purpose of understanding cross elasticity of demand in business decision-making?

    <p>To identify opportunities for product bundling. (A)</p> Signup and view all the answers

    Which of the following best describes the relationship between income elasticity of demand and the type of good?

    <p>Normal goods have a positive income elasticity of demand, while inferior goods have a negative income elasticity of demand. (A)</p> Signup and view all the answers

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