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Unit notes and practice questions

Grade 9 Economics unit 3: Economic Resources and Markerts

Everything here is for unit 3 of the Grade 9 Economics textbook: what the chapter covers, the short notes, practice questions with their answers, and the lesson video where one exists.

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3
Cards
10
Practice questions on unit 3
29–44
The textbook pages for unit 3

What unit 3 covers

  1. 1.Types of Resources and Factor Payments
  2. 2.Renewable and Non-renewable Resources
  3. 3.Types of Markets
  4. 4.Circular Flow of Economic Activities
  5. 5.Land as an Economic Resource in Ethiopia

Short notes for unit 3

The cards filed under this chapter on the Grade 9 Economics page. Open one at a time.

Soil TypeCharacteristicsAgricultural Potential
Red to reddish brown soilsFriable and good drainageWell endowed with minerals for crops
Brownish to grey and black soilsHigh clay contentExcellent potential with proper drainage

When you use it

Use this to distinguish the two dominant agricultural soil types found in the Ethiopian highlands.

Watch out

Black clay soils require proper drainage and conditioning to realize their potential, unlike naturally well drained red soils.

Drafted from Grade 9 Economics, pages 29-44, then checked twice before it went up

When you use it

Use this when analyzing transactions between households and business firms in circular flow diagrams.

Watch out

Real flows and money flows move in opposite directions. For goods, the real flow moves from firms to households, while the money flow moves from households to firms.

Drafted from Grade 9 Economics, pages 29-44, then checked twice before it went up

Factor of ProductionFactor PaymentDescription
LandRentGifts of nature and natural resources
LabourWagePhysical and mental human effort
CapitalInterestManufactured inputs like machinery
EntrepreneurshipProfitOrganizing inputs and taking business risk

When you use it

Use this table to match each economic resource with its corresponding factor reward or definition.

Watch out

Capital earns interest, not profit. Profit is the reward exclusively for entrepreneurship.

Drafted from Grade 9 Economics, pages 29-44, then checked twice before it went up

Practice questions on unit 3

10 multiple-choice questions written against this chapter, each with its answer and the reason. Try one before you open the answer.

Question 1

According to economics, what is the test of whether a resource is an economic good or a free good?

  1. A.The physical size of the resource
  2. B.The price of the resource
  3. C.The location where the resource is found
  4. D.The weight of the resource
Show the answer and why

Answer: B The price of the resource

Why

Price is the test of whether a resource is an economic good or a free good. Free resources have a price of zero, while economic resources command a non-zero price because they are scarce.

Question 2

Which of the following is classified as a non-renewable resource?

  1. A.Solar energy
  2. B.Wind energy
  3. C.Natural gas
  4. D.Geothermal pressure
Show the answer and why

Answer: C Natural gas

Why

Natural gas is a non-renewable resource because its reserve is fixed in the ground and limited in quantity. Solar, wind, and geothermal pressure are renewable resources.

Question 3

What is the reward or factor payment for the services of capital?

  1. A.Rent
  2. B.Wage
  3. C.Profit
  4. D.Interest
Show the answer and why

Answer: D Interest

Why

The factor payment for capital is interest. In contrast, land earns rent, labour earns wages, and entrepreneurship earns profit.

Question 4

What percentage of Ethiopia's total land area of 1,104,300 square kilometers is considered suitable for agriculture?

  1. A.15 percent
  2. B.25 percent
  3. C.35 percent
  4. D.50 percent
Show the answer and why

Answer: C 35 percent

Why

The textbook states that Ethiopia has a total area of 1,104,300 square kilometers, of which 35 percent is considered suitable for agriculture.

Question 5

A market where securities, bonds, and shares are traded between two parties to provide capital formation and liquidity is called a:

  1. A.labor market
  2. B.goods and services market
  3. C.financial market
  4. D.commodity market
Show the answer and why

Answer: C financial market

Why

A financial market is any place where securities, currencies, bonds, and other financial assets are traded to provide capital formation and liquidity for businesses.

Question 6

In the circular flow of economic activities, what is meant by a real flow?

  1. A.The payment of wages and rent from firms to households
  2. B.The flow of factor services from households to firms and goods from firms to buyers
  3. C.The expenditure of money by households on goods and services
  4. D.The collection of tax revenue by the government
Show the answer and why

Answer: B The flow of factor services from households to firms and goods from firms to buyers

Why

A real flow consists of factor services moving from households to producers, and goods and services moving from producers to buyers. Money flows represent the corresponding financial payments.

Question 7

Which of the following is a major feature of red-to-reddish brown soils in the Ethiopian highlands?

  1. A.They have high clay content and require heavy drainage conditioning
  2. B.They are friable and easy to plough
  3. C.They are found only in waterlogged lowlands
  4. D.They lack minerals necessary for growing crops
Show the answer and why

Answer: B They are friable and easy to plough

Why

Red-to-reddish brown soils are well endowed with minerals, found in areas of good drainage, and are friable (easy to plough).

Question 8

An entrepreneur in Hawassa brings together land, workers, and machinery to start a bakery and takes the risk of business losses. What factor payment does this person earn?

  1. A.Rent
  2. B.Interest
  3. C.Profit
  4. D.Wage
Show the answer and why

Answer: C Profit

Why

The owner provides entrepreneurship by organizing productive resources and taking business risks. The reward for entrepreneurship is profit.

Question 9

Which of the following is an underlying assumption of the two-sector circular flow model?

  1. A.Households save a portion of their income in commercial banks
  2. B.The government collects taxes to build infrastructure
  3. C.The economy engages in foreign trade through exports and imports
  4. D.Households spend their entire income on consumption
Show the answer and why

Answer: D Households spend their entire income on consumption

Why

The two-sector model assumes a closed economy with only households and firms, where there is no government, no foreign trade, and no saving (households spend all their income on consumption).

Question 10

In the three-sector circular flow model, what two monetary flows go directly from the government to households and business firms respectively?

  1. A.Taxes to households and factor payments to firms
  2. B.Transfer payments to households and subsidies to firms
  3. C.Wages to households and rent to firms
  4. D.Savings to households and dividends to firms
Show the answer and why

Answer: B Transfer payments to households and subsidies to firms

Why

In the three-sector model, the government injects funds into the economy by giving transfer payments to households and subsidies to business firms.

The app holds 12 questions on this unit, marked as you go. These are the first 10.

The textbook pages for unit 3

Unit 3 runs from page 29 to page 44 of the Ministry of Education edition.

Ministry of Education edition, English, 130 pages

Download the PDF

All Grade 9 Economics short notes

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