Economics Grade 12 Paper 2 KZN Prelim 2020 Question Paper

education Department: Education PROVINCE OF KWAZULU-NATAL NATIONAL SENIOR CERTIFICATE GRADE 12 " ECONOMICS P2 F PREPARATORY EXAMINATION * SEPTEMBER 2020 7 MARKS 7 150 DURATION : 2 Hours This question paper consists of 13 pages. Copyright reserved Please turn over SS M2

Downloaded from hlayiso.com INSTRUCTIONS AND INFORMATION al Answer FOUR questions as follows in the ANSWER BOOK. ° SECTION A : COMPULSORY e SECTION B: Answer any TWO of the three questions. e SECTION C : Answer any ONE of the two questions 2: Write the question number above each answer. 3. Answer only the required numbers of questions. Answers in excess of the required number will not be marked. 4. Answer the questions in full sentences and ensure that the format, content and context of your responses comply with the cognitive requirements of the questions. 5. Number the answers correctly according to the numbering system used in this question paper. 6. Read the questions carefully. Tt. Start each question on a new page. 8. Leave 2-3 lines between sub sections of questions. 9. Use only black or blue ink. 10. You may use a non- programmable pocket calculator. 11. Write legible and present your work neatly. Copyright reserved Please turn over M2

Downloaded from hlayiso.com Econor September 2020 Preparatory Examination SECTION A: COMPULSORY QUESTION 1 30 MARKS — 20 MINUTES 1.1. Various options are provided as possible answers to the following questions. Choose the correct answer and write only the letter (A-D) next to the question number (1.1.1-1.1.8) in the ANSWER BOOK, for example 1.1.9. D. 1.1.1. Profit maximization is achieved in a firm when... A AC =AR. B AVC = AR. Cc TR>TC. D MR > MC. 1.1.2 A market structure which is considered to be a hybrid market is the ...market. A perfect B monopoly Cc oligopoly D monopolistic competition 1.1.3 Price set by the government above market price to benefit businesses is the price... A floors B ceiling Cc wars D administration. 1.1.4 The demand curve of a firm in the perfect market is... A steep. B inelastic. Cc vertical. D horizontal. 1.1.5 The term short-run refers to a period where ...factors of production can change. A both variable and fixed B only variable Cc only fixed D floating Copyright reserved Please turn over M2

Downloaded from hlayiso.com 1.1.6 An international agreement held in 1997 where countries agreed to reduce their emission of the six greenhouse gases is the... A COP 17. B Rio 20 Summit. Cc Kyoto protocol. D Johannesburg Summit. 1.1.7 The inflation that measures unadjusted CPI figures is called ... inflation. A galloping B headline Cc hyper D all-inclusive 1.1.8 The introduction of harmful substances in the air is known as... A pollution. B externality. Cc sustainability. D climate change. (8 x 2) (16) Copyright reserved Please turn over M2

Downloaded from hlayiso.com Econor September 2020 Preparatory Examination 1.2. Choose a description from COLUMN B that matches the item in COLUMN A. Write only the letter (A-I) next to the question numbers (1.2.1. to 1.2.8) in the ANSWER BOOK. COLUMN A COLUMN B 1.2.1 Administered A Transportation, telecommunications, water prices supplies to enable economic activities. 1.2.2 Price B_ Acost to society created by market inefficiency. discrimination 1.2.3 Pareto efficiency C The uncontrolled removal of vegetation in an unsustainable way. 1.2.4 Dead weight D_ The practice of charging different prices to different consumers for the same good or service. 1.2.5 Indigenous Knowledge E A measure of price increases that excludes Systems volatile elements such as fuel and energy. 1.2.6 Infrastructure F Sustained and significant increase in the general price level. 1.2.7 Core inflation , G_ Acombination of local knowledge for all forms of 1.2.8 Deforestation activities that are unique to a given culture. H_ When it is not possible to make one person better off without making another person worse off. | Set or controlled by the government. (8 x 1) (8) 1.3. Give ONE term for EACH of the following descriptions. Write only the term next to the question numbers (1.3.1 to 1.3.6) in the ANSWER BOOK. Abbreviations, acronyms and examples WILL NOT be accepted. 1.3.1. The minimum earnings required to prevent the entrepreneur from leaving the business. 1.3.2 An agreement between businesses to limit competition between them. 1.3.3 A statutory body whose main objective is to investigate, control and evaluate restrictive business practises. 1.3.4 The value of inputs owned by an entrepreneur used in a business. 1.3.5 A condition when too much money is spent in purchasing too few goods. 1.3.6 Plants and animal life found within a specified geographical region. (6 x 1) (6) TOTAL SECTION A: [30] Copyright reserved Please turn over M2

Downloaded from hlayiso.com SECTION B Answer any TWO of the three questions in this section in the ANSWER BOOK. QUESTION 2: MICROECONOMICS 40 MARKS — 30 MINUTES 2.1. Answer the following questions. 2.1.1. Give any TWO characteristics of public goods. (2x1) (2) 2.1.2 Why does the government intervene when market failure occur in the economy? (1x2) (2) 2.2 Study the graph below and answer the questions that follow PRICE MC \ ATC a A AVC R10 : D/MR I 1 0 ! 200 QUANTITY 2.2.1 Identify the shutdown point from the graph above. (1) 2.2.2 Mention ONE feature which shows that the above graph is of a single (1) firm. 2.2.3. Describe the term marginal cost. (2) 2.2.4 Briefly explain the reason for a perfect market to make a normal profit in the long run? (2) 2.2.5 Why is the rising part of the MC above point B is the supply curve? (2x2) (4) Copyright reserved Please turn over M2

Downloaded from hlayiso.com Econor September 2020 Preparatory Examination 2.3. Study the graph below and answer the questions that follow. COST BENEFIT ANALYSIS FOR BUILDING A HOSPITAL AT SHONGWENI DEVELOPMENT PROJECT © Building cost * Pollution e Employment Natural resources Increase in revenue High quality product Labour force Increase in savings High quality equipment BENEFITS Quality service delivery (Source: www.google.com 2.3.1 Give ONE example of external cost from the provided information. (1) 2.3.2 Identify the social benefit from the provided information above. (1) 2.3.3 Describe the term cost benefit analysis. (2) 2.3.4 Briefly explain the benefits that the government will receive from the approval of the above project? (2) 2.3.5 Why should the government conduct CBA before starting a project? (4) 2.4 Distinguish between allocative and technical inefficiency. (4x2) (8) 2.5 How does immobility of the factors of production cause market failure? (8) [40] | Copyright reserved Please turn over M2

Downloaded from hlayiso.com QUESTION 3: CONTEMPORARY ISSUES 40 MARKS -— 30 MINUTES 3.1. Answer the following questions. 3.1.1 Give TWO types of consumer inflation. (2 x 1)(2) 3.1.2 How do debtors benefit from increased inflation? (1 x 2) (2) 3.2 Study the graph below and answer the questions that follow. INFLATION DATA — SOUTH AFRICA YEAR Current prices | Constant prices | Deflator Inflation (%) (Rbillion) (Rbillion) 2016 3 625 714 2 786 739 130 7.2 2017 3 880 824 2 805 240 138 8.2 2018 4171729 2842 416 146 A (Source: Quarterly Bulletin December 2018) 3.2.1. What is the South African Reserve Bank (SARB) inflation rate target? (1) 3.2.2 Which year is currently used by the South African Reserve Bank (SARB) 3.2.3 3.2.4 3.2.5 as the base year? Briefly explain the term constant prices. Briefly explain the purpose of measuring the inflation rate in the economy. Calculate rate of inflation for year 2018. Show all calculations. Copyright reserved M2 (1) (2) (2) (4) Please turn over

Downloaded from hlayiso.com Econo September 2020 Preparatory Examination 3.3. Read the extract below and answer the questions that follow. Desperate times call for desperate measures A problem as complex as climate change requires efforts by the individuals, businesses and government. The solutions must be technological, economic and political. During the UN’s international climate conference (COP21), 196 nations signed the Paris agreement and Paris Rulebook. These two documents will serve as a roadmap for governments and businesses to keep temperatures below 1,5°C. Renewable energy must provide 100% of our energy needs. Transportation is electrified everywhere from electric buses to electric cars replacing thermal motors. 3.3.1 Give ONE example of renewable resource. (1) 3.3.2 Where was the COP21 held? (1) 3.3.3 Describe the term conservation (2) 3.3.4 Briefly explain the contribution by individuals to limit climate change. (2) 3.3.5 What effect would global warming have on the economy? (2 x 2) (4) 3.4 Differentiate between consumer price index (CPI!) and producer price index (PPI). (4 x 2) (8) 3.5 Evaluate the success of monetary policy measures in combating demand —pull inflation in South Africa? (8) [40] Copyright reserved Please turn over M2

Downloaded from hlayiso.com QUESTION 4 MICROECONOMICS AND CONTEMPORARY ISSUES 40 MARKS - 30 MINUTES 4.1 Answer the following questions. 4.1.1. Give any TWO types of pollution. (2 x 1) (2) 4.1.2 How do consumers benefit from business competition in the market? (1x 2)(2) 4.2 Study the graph below and answer the questions that follow. B oO S2 Fe co q [| ......, KX Negative T rl externality Pp, |~L-~_,«_ _ ! 1 s H H 1 ! ' 1 a D 7 1 a Qo Qi Quantity 4.2.1 Name the shaded area in the graph. (1) 4.2.2 Give ONE example of positive externality. (1) 4.2.3, Describe the term externalities. (2) 4.2.4 Briefly explain the negative effect of a decrease in demand for cigarettes have in the economy? (2) 4.2.5 How does the government encourage positive externalities in the economy? (2 x 2) (4) | i | Copyright reserved M2 Please turn over

Downloaded from hlayiso.com Econo! September 2020 Preparatory Examination 4.3 Study the extract below and answer the questions that follow NEW INFLATION HIGHER The official inflation rate will most probably rise when the CPI basket is adapted to include more products currently being used by most South African households, for example bread rolls, vodka, lawn mowers, washing machines and tablets (electronic devices), and exclude products such as mustard, calculators, fish paste and viennas. An increase in the official rate of inflation may lead to more claims from workers to increase their wages and salary levels. Increased salaries in the public service will place an even greater burden on the budget deficit. This may even have serious consequences for interest rates in the future. [Adopted from Sunday Times, March 2020] 4.3.1 Give another term for the unadjusted CPI inflation rate. (1) 4.3.2 Name ONE good that will be excluded from the CPI basket in future. (1) 4.3.3. Describe the term core inflation. (2) 4.3.4 Briefly explain the reason for workers to claim wages above the inflation rate? (2) 4.3.5 Why is it necessary to adopt the CPI basket? (2 x 2) (4) 4.4 Differentiate between natural monopoly and artificial monopoly. (2 x 4) (8) 4.5 Howcan government achieve the objectives of the competition act of South Africa? (8) [40] TOTAL SECTION B: = [80] Copyright reserved Please turn over M2

Downloaded from hlayiso.com SECTION C Answer any ONE of the two questions in this section in the ANSWER BOOK. Ensure that your answer follows the structure indicated below in order to obtain maximum marks: STRUCTUTURE OF ESSAY MARK ALLOCATION Introduction The introduction is a lower order-response Max. 2 e A good starting point would be to define the main concept related to the question topic. Do not include any part of the question in your introduction. Do not include any part of the introduction in your body. Avoid saying in the introduction what you are going to discuss in the body. Body Main part: Discuss in detail/ In depth discussion/ Examine/ Critically Max. 26 discuss/ Analyse/ Compare/ Evaluate/ Distinguish/Differentiate/ Explain. Additional part: Give own opinion/ Critically discuss/ Evaluate/ Critically evaluate/ Draw a graph and explain/ Use the graph given and Max. 10 explain/ Complete the given graph/ Calculate/ Deduce/ Compare/ Explain/ Distinguish/ Interpret/ Briefly debate/ How/ Suggest Conclusion Any high-order conclusion should include: Max. 2 e A brief summary of what has been discussed without repeating facts already mentioned. e Any opinion or value judgment on the facts discussed. e Additional support information to strengthen the discussion/ analysis. e Acontradictory viewpoint with motivation, if required. e Recommendations. TOTAL 40 QUESTION 5: MICROECONOMICS 40 MARKS - 40 MINUTES e Discuss an oligopoly as a market structure. (26) e How do oligopolists compete without using price to increase their market share? (10) [40] Copyright reserved Please turn over M2

Downloaded from hlayiso.com Econo! September 2020 Preparatory Examination QUESTION 6: CONTEMPORARY ISSUES 40 MARKS - 40 MINUTES e Discuss in detail measures used by the government to ensure a sustainable environment. (26 marks) « How has the government achieved success in conserving the environment in South Africa? (10 marks) [40] TOTAL SECTION C: [40] GRAND TOTAL: [150] Copyright reserved M2