1)

(A)

(i) Economies - the state of a country or region in terms of the production and consumption
of goods and services and the supply of money.

(ii) Economy – the economy is the mechanism through which these scares resources are
organized for the production of goods and services.

(iii) Two examples of an economic goods are:

 Education
 Healthcare

(B) (i) The type of market structure is a Monopoly in which there is one seller and many buyers
of a unique product which in this case is electricity. In a monopoly the firm is the price setter
and there is a high barrier to entry. On the other hand, monopolistic competition is a type of
market structure in which there is many buyers and many sellers of different products. In
this market structure there is a low barrier to entry.

(ii) the type of market mention is an oligopoly; an oligopoly market is where by there is few that is

Dominating in the market while a perfect competition is where by a market structure in which there
many buyers and many sellers, producing a homogenous product, there is perfect knowledge in this
market, where by buyers and sellers are aware of the product, its price and the other buyers and
sellers.

(C) A trade-off is where as one thing increases; another thing must decrease. In the case of
Egbert, he has to decide whether to hire a secretary to help him with the patients or not to
hire a secretary and let the patients wait. In Economics, choice is defined as the range of
options available to the individual. If Egbert hires a secretary, he will have to pay the
individual and will not have to do the work by himself. However, if he does not hire a
secretary, he will have to do the work by himself
This is known as opportunity cost which is defined as the next best alternative forgone
 2) (i) production – is defined as the conversion of factors of production into goods and services
that consumers wish to consume. Production involves the transforming of raw materials into
finished products.

(ii) The reward of:

 Land – Rent
 Labour – wage
 Capital - interest
 Entrepreneurial talent – profit

(B) Two advantages are:

(i) A company – 1) If a company has high labour efficiency, it can produce more in less time which
will allow it to earn more in a shorter span of time.

2) Efficiency of labor increases the quantity and quality of output produced in an industry. As a
result, goods and services are available to the people at lower prices.

(ii) A country – 1) If a country has high labour productivity, it can be able to produce more locally as
well as enough to be able to export more than it already is.

2) Labour productivity will directly affect the GDP, which means if labour productivity is very high
then the GDP of the country should be high, higher GDP in the country signals economic growth.

(c) (i) fixed cost - Fixed cost = (rent)$12000 + (insurance)$1500

=$13 500

(ii) total cost – total fixed cost + total variable cost

Total cost = $13500 + $2+ $2.25+ $2.50+ $2.75+ $3 +$300

= $ 13 812.50

Marginal cost - Marginal cost = $2+ $2.25+ $2.50+ $2.75+ $3

= $12.50