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Foundations

Basic economic concepts

Scarcity means wants are greater than resources, so every choice has an opportunity cost, which is the next best alternative given up.

CAPS

Grade 10 · Economics · Foundations

Economics wants the concept, then the diagram or the data, then the consequence.

  • The papers

    Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.

  • How to write it

    Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.

  • How a marker reads it

    A common mix-up is calling the price the opportunity cost, when the price is what you pay and the opportunity cost is the other thing you can no longer have.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. A learner in Tembisa has R50 on a Thursday. A weekend data bundle costs R50, and a past-paper book at the school gate also costs R50. She buys the data. The opportunity cost is the past-paper book, the next best thing she gave up, not every other item in a shop. Scarcity is the R50 that cannot cover both. If she had R100, both could be bought and this opportunity cost would not exist.

More worked examples

  • Pietermaritzburg Saturday choice

    A Grade 11 boy in Pietermaritzburg can work a Saturday shop shift for R200 or attend a soccer trial the same morning. He cannot do both, and he chooses the trial. The opportunity cost is the R200 shift, the next best use of that morning. Scarcity here is time, not only rands. The bus fare to the trial is a money cost of going, and it is not the opportunity cost.

  • QwaQwa plot

    A household in QwaQwa has one small plot. They can plant mielies or put a room on the plot and let it for R500 a month. They plant mielies. If letting the room was the next best use, the opportunity cost is the rent they do not earn. A dream of a spaza on the same land does not get added unless that spaza was truly the next choice, and scarcity is the single plot, which cannot be a field and a rental room at once.

In ordinary words

Money, time and goods are limited, so taking one use means not taking another. The opportunity cost is not every alternative on a long list, but the single next best thing that was actually given up. A third option that was never really in the running is not the opportunity cost. Without scarcity both options could be taken, and that particular opportunity cost would disappear.

In South Africa

At a Tembisa school gate a data voucher and a past-paper book both cost R50, and the pocket holds only one of those amounts.

Part 1 / 4

What it is

Scarcity means wants are greater than resources, so every choice has an opportunity cost, which is the next best alternative given up.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Thandi has R200. She can buy a textbook (R200) or go to a concert (R200). She buys the textbook. What is her opportunity cost?

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Thandi has R200. She can buy a textbook (R200) or go to a concert (R200). She buys the textbook. What is her opportunity cost?

Before any working — hunt first

Given

Numbers and units already in the sentence: R200 · R200 · R200. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: What is her opportunity cost. Circle that word — that is the missing variable.

Find

We are required to find: What is her opportunity cost. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Opportunity cost = the next best alternative given up. Then substitute the given, one line at a time, to get What is her opportunity cost.

In other words — as if you have never seen this before

If you have never seen this before: Opportunity cost = the next best alternative given up. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Two choices, R200 each.

3. Which method — and why this one?

Opportunity cost = the next best alternative given up.

4. Step-by-step working

  1. 01 / 08

    Step A — Read the question twice

    Slow down. Circle the word that names the unknown. Underline every number and its unit. Do not grab a formula yet — first decide what the paper is actually asking.

    Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.

  2. 02 / 08

    Step A2 — Hunt: Given, Missing, Find, Calculate

    Given: Numbers and units already in the sentence: R200 · R200 · R200. Copy each one into a column. A name without a number is not given. Missing: After you copy the given, the letter that still has no number is missing. The paper is pointing at: What is her opportunity cost. Circle that word — that is the missing variable. Find: We are required to find: What is her opportunity cost. Write that as a symbol on the left, with a question mark, before you touch a formula. Calculate: What we need to calculate: Opportunity cost = the next best alternative given up. Then substitute the given, one line at a time, to get What is her opportunity cost.

    Why this step: Do not name the letters yet. First hunt: what already has a number (Given), what has no number (Missing), the word the paper wants (Find), and which formula still contains the missing letter (Calculate).

  3. 03 / 08

    Step B — Write the given in a column

    Two choices, R200 each.

    Why this step: A column with units stops you mixing cm with m, or minutes with seconds. Markers can also see you started correctly.

  4. 04 / 08

    Step C — Name the method in words

    Opportunity cost = the next best alternative given up.

    Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.

  5. 05 / 08

    Identify the given

    The concert she gave up.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  6. 06 / 08

    Step G — Sense-check the size

    Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.

    Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.

  7. 07 / 08

    Step F — Box the answer with its unit

    The concert.

    Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.

  8. 08 / 08

    Step H — What the marker is looking for

    On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.

    Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

The concert.

Copy onto your answer sheet — in this order

Answer: The concert.

6. Check it like a marker

Opportunity cost is not money; it is the forgone option.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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