Economic Management Sciences Grade 7 June 2018 Memo

Downloaded from hlayiso.com 1 TOM NEWBY SCHOOL EXAMINATION Subject EMS Examiner Miss L Klemp/Miss B Botha Date 14 June 2018 Total marks 75 Session 1 Duration 1h30mins Grade 7 Moderator Mrs A Singh Special instructions/Equipment Calculators may be used, but NO sharing. This assessment has been compiled using notes and information contained in the Tom Newby School resource material. The marking memorandum has been compiled accordingly. While alternative responses will be given due acknowledgement, the official memorandum will be considered a priority document to ensure uniformity of marking. ________________________________________________________________________________________________________________________________________________ Name and Surname: _________________________________________ Class: ____________ 75 Instructions: 1. Write your name, surname and class on the question paper. 2. Answer all questions on the question paper. 3. Read each question carefully and answer according to the mark allocation. 4. Write neatly and legibly.

Downloaded from hlayiso.com 2 Question 1: (5) 1. Fill in the missing words: 1.1 The economic problem, is that needs and wants are ____________________, but resources to satisfy them are ______________________. 1.2 Households who buy and use goods are called _______________________. 1.3 The businesses that make and supply goods are called __________________ businesses. 1.4 We call resources which will run out completely one day, ___________________ resources. Question 2: (5) Match Column A to Column B. Write the letter from Column B, in the spaces below. COLUMN A COLUMN B 2.1 VAT a) Refuse removal 2.2 Formal business b) Assets – Liabilities 2.3 Net worth c) Money paid monthly to employees 2.4 Salary d) An illegal business 2.5 Community need e) Tax paid on goods and services f) A business that has registered for tax and keeps accurate records g) Liabilities – Assets 2.1 2.2 2.3 2.4 2.5 Question 3: (31) 3.1 How do we distinguish between a formal and informal business? Provide three points under each heading. (6) FORMAL BUSINESS INFORMAL BUSINESS

Downloaded from hlayiso.com 3 3.2 Explain the differences between a Developed and Developing Country. Give two very clear differences. (4) DEVELOPED COUNTRY DEVELOPING COUNTRY 3.3 If “Consumer goods” is one type of Goods – name the two other types of goods, and give a brief explanation of each. (4) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3.4 Provide a definition for the following terms: 3.4.1 Trading Business (2) ________________________________________________________________________ _______________________________________________________________________ 3.4.2 Services Business (2) ________________________________________________________________________ ________________________________________________________________________ 3.4.3 Natural disaster (2) ________________________________________________________________________ ________________________________________________________________________ 3.4.4 Health epidemic (2) ________________________________________________________________________ ________________________________________________________________________

Downloaded from hlayiso.com 4 3.5 Discuss four effects that natural disasters and health epidemics have on businesses. (4) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 3.6 Give a brief explanation of Bartering. (1) ________________________________________________________________________ ________________________________________________________________________ 3.7 List four disadvantages of bartering. (4) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Question 4: (15) This is Mr Smith’s budget. Income Amount Expenses Amount Salary (after tax) R5 100 Rent R1 500 Electricity R 120 TOTAL R5 100 Food R1 250 Taxi R 700 Cell phone R 600 Entertainment R 600 Clothing R 480 Private Chef R 650 Total R5 900

Downloaded from hlayiso.com 5 4.1 What do you notice about Mr. Smith’s Budget? (1) ________________________________________________________________________ 4.2 Is this a balanced budget? Give a reason for your answer. (2) ________________________________________________________________________ ________________________________________________________________________ 4.3 What would you suggest he could do to manage his money better? Give two suitable answers by looking at his budget. (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4.4 Should he be saving any money? Give a reason for your answer. (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4.5 What can you do to ensure you save money? (2) ________________________________________________________________________ ________________________________________________________________________ 4.6 What is the difference between income and expenses? (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 4.7 Why is it better to have a surplus than a deficit in a business? (2) ________________________________________________________________________ ________________________________________________________________________ 4.8 Explain the difference between Fixed Income and Variable Income. (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

Downloaded from hlayiso.com 6 Question 5: (19) 5.1 Calculate the Net Worth of Joe Soap using the information below. (10) Savings account: R2 360 Money borrowed from uncle R600 Credit card payments: R176 Money owing on car: R2 270 Short term insurance: R150 School fees due: R200 He owns his cell phone: R1 800 Owns clothing worth: R2 800 He owns a watch worth: R320 Money owing on his X-box: R1200 Owns all his office equipment: R5 200 ____________________________________________________ 5.2 Name two groups of people or institutions that will be interested in the Financial Statements of a business. (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

Downloaded from hlayiso.com 7 5.3 Read the case study about Abdul, then answer the questions that follow: Abdul saves and invests in his future For many years, Abdul and his family lived in a fishing community. They were subsistence fishermen, which means that they ate the fish they caught. They sometimes sold some fish to tourists in order to buy other things they needed. Abdul noticed that if he fished for a few more hours a day than usual, he caught much more fish than he needed. He made an arrangement with a fish and chips shop to sell all his surplus fish to them. In a nearby boatyard, he saw a small rowing boat that needed repairs done and was for sale. He decided to save the extra money he made in order to buy the boat. When he had saved enough money, he bought the boat and did the repair work in his spare time. He now needed money for a fishing licence. To make extra money, he bought the excess fish from his fellow fishermen at a nominal fee and then sold it to the fish shops in a nearby town. Soon Abdul had enough money for his fishing licence. He could now go out in his rowing boat and catch much more fish than he had from the shore. He sold this fish at the fish market nearby, thereby making more money that before. Eventually Abdul had enough money for a bigger boat and he could also employ people to work for him. Abdul saw an opportunity, saved his money and made an investment in his future and that of his family. He became a small businessman and improved the quality of life for himself and his family. By employing other fishermen, he also created jobs and opportunities for other people. This is also an investment in the economy of the country and the community. 5.3.1 How did Abdul save money for what he needed? (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

Downloaded from hlayiso.com 8 5.3.2 What “investments” did Abdul make to help his business grow? (3) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 5.3.3 The selling of surplus goods is an important step in economic development. Explain why? (2) ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ TOTAL: 75 MARKS

Downloaded from hlayiso.com 9 TOM NEWBY SCHOOL EXAMINATION Subject EMS Examiner Miss L Klemp/Miss B Botha Date 14 June 2018 Total marks 75 Session 1 Duration 1h30mins Grade 7 Moderator Mrs A Singh Special instructions/Equipment Calculators may be used, but NO sharing. MEMORANDUM NO. ANSWER MARK LEVEL 1. Fill in the missing words: 5 1 1.1 The economic problem is that needs and wants are unlimited,√ but resources to satisfy them are limited.√ 1.2 Households who buy and use goods are called consumers.√ 1.3 The businesses that make and supply goods are called manufacturing √businesses. 1.4 We call resources which will run out completely one day, non-renewable √resources. 2. Match Column A to Column B. Write the letter from Column 5 1 B, in the spaces below. COLUMN A COLUMN B 2.1 VAT a) Refuse removal b) Assets – Liabilities 2.2 Formal business c) Money paid monthly to 2.3 Net worth employees 2.4 Salary d) An illegal business 2.5 Community need e) Tax paid on goods and services f) A business that has registered for tax and keeps accurate

Downloaded from hlayiso.com 10 records g) Liabilities – Assets 2.1 e√ 2.2 f √ 2.3 b√ 2.4 c√ 2.5 a√ 3.1 How do we distinguish between a formal and informal business? 6 3 Provide three points under each heading. FORMAL BUSINESS INFORMAL BUSINESS Formal procedures No formal set-up Permanent address Can move around Keep official records No records Pays taxes No tax payable Sophisticated marketing Uses unsophisticated methods marketing methods (any 3)√√√ (any 3)√√√ 3.2 Explain the differences between a Developed and Developing 4 3 country. Give two very clear differences. DEVELOPED COUNTRY DEVELOPING COUNTRY Advanced industrialisation Very little industrialisation High standard of living Low standard of living High average income Low average income Work is more for big Large percentage of work businesses force in small business (any 2)√√ (any 2)√√ 3.3 If “Consumer goods” is one type of Goods – name the two other 4 3 types of goods, and give a brief explanation of each. Capital goods√: used to produce other goods e.g. machinery, delivery vehicles.√ Semi-finished goods√: goods used to manufacture other goods.√

Downloaded from hlayiso.com 11 3.4 Provide a definition for the following terms: Trading Business: retailers who sell products made by other 2 2 businesses. √They sell goods at a profit.√ Service business: sell their skills and time√ – includes 2 2 transport.√ Natural disaster: natural events that damage the environment 2 2 √e.g. floods, hurricanes√ Health epidemic: diseases that affect a population√ and is wide 2 2 spread.√ 3.5 Discuss four effects that natural disasters and health epidemics 4 3 has on businesses. 1. One person can infect many others. 2. Businesses have to spend money on training other people. 3. Destroys infrastructure 4. The economy slows down. 5. Insurance companies lose billions of rands. 6. Households suffer when the breadwinner of the house is killed. (any 4)√√√√ 3.6 Give a brief explanation of Bartering. 1 2 Personal possessions of value can be exchanged for other good. √ 3.7 Give four disadvantages of bartering. 4 2 1. Not always practical. 2. No common measure of value. 3. No late payments allowed. 4. Certain goods can’t be divided into smaller units. (Other valid arguments) (any 4) √√√√

Downloaded from hlayiso.com 12 4. This is Mr Smith’s budget. Income Amount Expenses Amount Salary (after R5 100 Rent R1 500 tax) Electricity R 120 TOTAL R5 100 Food R1 250 Taxi R 700 Cell phone R 600 Entertainment R 600 Clothing R 480 Private Chef R 650 Total R5 900 4.1 What do you notice about Mr. Smith’s Budget? 1 2 His expenses are more than his income.√ 4.2 Is this a balanced budget? Give a reason for your answer. 2 5 No.√ Income should be more than expenses.√ 4.3 What would you suggest he could do to manage his money 2 5 better? Give 2 suitable answers by looking at his budget. He should spend less on clothing/cellphone/entertainment.√ He should cook his own food.√ 4.4 Should he be saving any money? Give a reason for your 2 5 answer. Yes. √ If he has an emergency situation that’s require cash, he will not be able to afford /make payment without a savings.√ 4.5 What can you do to ensure you save money? 2 6 Never spend more than you earn. Pay off all your debt. Think before spending.

Downloaded from hlayiso.com 13 Use money to buy basic needs. Plan for the future. Make long term goals. Make a budget. (any 2)√√√ 4.6 What is the difference between income and expenses? 2 2 Income: money that your receive.√ Expenses: spending money on goods and services.√ 4.7 Why is it better to have a surplus than a deficit in a business? 2 5 With a surplus, you have more than you need.√ With a deficit, you don’t have enough money to pay for your needs.√ 4.8 Explain the difference between Fixed Income and Variable 2 3 Income Fixed income: receive the same amount regularly√ Variable income: there are “windfalls” – it changes all the time e.g. wages√ 5.1 Calculate the Net Worth of Joe Soap using the information 10 5 below. Savings account: Money borrowed from uncle R2 360 R600 Credit card payments: Money owing on car: R176 R2 270 Short term insurance: School fees due: R150 R200 He owns his cell phone: Owns clothing worth: R1 800 R2 800 He owns a watch worth: Money owing on his X-box: R320 R1200 Owns all his office equipment: R5 200

Downloaded from hlayiso.com 14 Statement of Net Worth for Joe Soap√ ASSETS LIABILITIES Savings 2360√ Credit card 176√ Cell phone 1800√ Insurance 150√ Watch 320√ Load – uncle 600√ Office equipment 5200√ Car 2270√ Clothing 2800√ School fees 200√ X-box 1200√ R12480√ R4596√ Net Worth: R12480 – R4596 = R7884√√ 5.2 Name 2 groups of people or institutions that will be interested in 2 4 the Financial Statements of a business. Partners of the business. SARS Employees and trade Unions. Banks/Financial services Potential buyers Managers/creditors/suppliers (any 2)√√ 5.3.1 How did Abdul save money for what he needed? 2 1 Fished for a bit longer and sold his excess fish.√ Bought excess fish from the other fisherman and sold it at a profit.√ 5.3.2 What “investments” did Abdul make to help his business grow? 3 2 He bought a boat. Got a fishing licence. Bought a bigger boat thereafter. Employed other people to work. Invested in his family’s future. “Grew” the economy of the community. (any 3)√√√

Downloaded from hlayiso.com 15 5.3.3 The selling of surplus goods is an important step in economic 2 6 development. Explain why. You now have cash to invest or grow your business.√ You are able to employ others, which leads to theirs families living a better life.√