Economics Grade 10 Paper 2 North West June 2017 Memo

NATIONAL SENIOR CERTIFICATE GRADE 10 ECONOMICS PAPER 2 JUNE 2017 MEMORANDUM MARKS: 100 This marking guideline consists of 10 pages.

2 Economics/P2 NSC- Memorandum NW/June 2017 SECTION A QUESTION 1 1.1. MULTIPLE CHOICES 1.1.1. C/heterogeneous√√ 1.1.2. C/diminishing marginal utility√√ 1.1.3. A/as price increases supply increases as well√√ 1.1.4. B/opportunity cost√√ 1.1.5. B/encouraging people to work hard√√ (5x2) (10) 1.2. MATCH COLUMN 1.2.1 F/ effectiveness of product in satisfying wants √ 1.2.2 D / when products produced have not reached the people that they need most √ 1.2.3 A/ different combinations of goods and services that gives same satisfaction √ 1.2.4 E/ taxes levied on the income √ 1.2.5 C / a minimum price for which goods can be sold √ (5x1) (1) . 1.3. GIVE ONE WORD 1.3.1 market√ 1.3.2 market supply√ 1.3.3 efficiency√ 1.3.4 scarcity√ 1.3.5 sin tax√ (5x1) (5) TOTAL SECTION A: 20

3 Economics/P2 NSC- Memorandum NW/June 2017 SECTION B QUESTION 2 2.1 Answer the following questions 2.1.1 Name any two forms of utility  Form utility√  Place utility√  Time utility√  Possession utility √ (any 2X1) (2) 2.1.2 What does it mean by equilibrium price?  Price at which demand and supply are the same  (1x2) (2) 2.2 Data response 2.2.1 Calculate market demand from the above table. (4X1) (4) A) 230√ B) 200√ C) 160√ D) 130√ 2.2.2 Draw an aggregate demand curve and label it correctly. (6) 12 10 8 Price (R) 6 D 4 √√ 2 0 130 160 200 230 Q √√

4 Economics/P2 NSC- Memorandum NW/June 2017 2.3.1 Identify the LOGO on the above cartoon (1X1)(1)  TATA POWER 2.3.1 Identify the market structure does the above brand belong to? (2x1) (2)  Imperfect market 2.3.2 Explain TWO characteristics of the market structure you identified. (3 x 2)(6)  Few sellers Can influence the price by changing the quantity supplied   Heterogeneous product. Buyers have to shop around for the best deal.    Imperfect information Sellers do not have complete information about products  Seller has control over the price  Entry into the market restricted Licences issued by the state to only one or few producers  2.3.3 Suggest a way to control the above mentioned market practices (2x2)(4)  Government legislations√√  Anti competitive policies etc. √√ 2.4 Briefly explain the conditions that must be met for a good to be traded in the world market. (4x2)(8)  There must be a wide demand  It must be mobile  It must be durable  Transport must be small in relation to the value of the goods  Import or export of the commodity must not be restricted 2.5 Discuss the term ‘self regulatory function’ of the markets. (4x2)(8)  Market do not require any direct intervention or control form outside forces√√  Guided by an invisible hands(demand and supply) √√ ,which ensures that prices are set in such a way that resources are allocated efficiently√√  The decisions of what to produce, in what quantities and for what price are made automatically within the market√√  So market said to have self regulating function√√ [40]

5 Economics/P2 NSC- Memorandum NW/June 2017 QUESTION 3 3.1. Name TWO examples of public goods.  Street light. √  Roads. √  parks. √ (2x1) (2) 3.1.2. List any two properties of indifference curve?  Indifference curves are downwards sloping√  Higher indifference curves are preferred to a lower ones√  Indifference curves do not cross √  Indifference curves are bent inwards√ (any 2x1) (2) 3.2 Study the graph below and answer the questions that follow: 3.2.1 Identify the graph above  Pen and pencils √√ (2) 3.2.2 What phenomenon depicted in the above graph.  PPC shifting inwards and to the left √√ (2) 3.2.3 What are the possible reasons for the shift in the above curve.  drought √√  land pollution √√  workers were not trained efficiently√√  equipment not looked after or replaced √√ (3x 2) (6) 3.3.1 Identify two items shown in the cartoon (2)  South African social security agency √√ 3.3.2 What is the responsibility of the SASSA? (2)  providing social security grant√√ 3.3.3 Mention any four types of the grants provided by the government (4x1) (4)  old age grant  disability grant  war veteran’s grant  child support grant  foster child grant  care dependency grant

6 Economics/P2 NSC- Memorandum NW/June 2017 3.3.4 How does the government find money to pay for the grants (2)  government find money to pay the social grant from the taxes √√  donations etc. 3.4 Briefly discuss the term Pareto efficiency? (8)  Named after Italian economist vilfredo Pareto. √√  Occurring when it is not possible to change existing allocation of resources in such a way that someone is made better off without making someone else worse off . √√  Pareto efficiency is achieved when productive and allocative efficiency coincides√√  Also called Pareto optimality. √√ 3.5 Differentiate between employment subsidy and income subsidy? (8) Employment subsidy-  This is the subsidization of wages by the government as an incentive to business to create more job opportunities. √√  There by reducing the level of unemployment in the economy√√  SMMEs qualify for cash grant√√ Income subsidy-  This is subsidization of persons through transfer payments, √√  eg.social security benefit (old age grant, disability grant) √√  in order to allow them to enjoy some minimum standard of living√√ (2x4) (8) [40] TOTAL SECTION B: 40

7 Economics/P2 NSC- Memorandum NW/June 2017 SECTION C QUESTION 5 Market can be classified in to different types, perfect, monopoly,oligopoly or monopolistic markets  Tabulate the characteristics of above mentioned markets. (26) INTRODUCTION Distinction can be made between perfect and imperfect market based on the number of suppliers, nature of the products, barriers to entry and availability of information (Accept any relevant Introduction) √√ (2) BODY: MAIN PART Type of Number of Freedom of Nature of Ability of examples market buyers entry product supplier to and change prices sellers Perfect Many Entry in to Product sold Sellers on the Market for (Max 8 marks market buyers the market on the market are wheat,bee and is market is price takers. f,gold√√ sellers on unrestricte homogeneo No supplier the d, easy to us√√ can influence market√√ enter and the price ) leave the market√√ Monopol There is Entry into Product sold Seller on the Telkom max 6 marks y only one the market on the market is a eskom√√ seller on is market is price maker. the restricted unique for The seller can market√√ or which there change the completely is no close price at will√√ blocked√√ substitute√√ Oligopol There are Entry into Products Seller on the Car (max 6 marks) y few the market sold on the market is a dealers, sellers on is market are price maker. Cell the restricted√ heterogeneo The seller can phone market√√ √ us. They are manipulate providers differ in the price. √√ √√ price or features or bonus offers√√ Monopol There are Unrestricte Similar They are Restauran (max 6 istic many d, that is product sold price setters ts

8 Economics/P2 NSC- Memorandum NW/June 2017 market buyers easy to on the to a lesser Petrol and enter and market but degree√√ stations sellers on leave the differ due to builders√√ the market√√ location or marks) market√√ advertising√ √ (Max 26) BODY: ADDITIONAL PART  In addition, explain the criteria to identify a market. (10) The structure and dynamics within the market depend on some of the factors.  Number of buyers and sellers within the market√√  The nature of the product√√  The rules and restrictions when buyers and sellers are trying to enter or exit the market√√  The information that is available to buyers and sellers and how easy it is to collect the information √√  The sellers ability to set the price √√ (max. 10) CONCLUSION  Accept any relevant conclusion√√ [40]

9 Economics/P2 NSC- Memorandum NW/June 2017 QUESTION 6 The government intervenes in the economy in different ways; one way is by setting minimum wages for workers. On the basis of this  Analyse the above statement in detail with the aid of a graph. (26)  In addition, briefly discuss why the government intervenes in the market .(10) [40] INTRODUCTION  Minimum wage is the lowest wage that an employer is allowed to pay a worker per month√√  To ensure workers earn enough money to cover their basic cost of living (2) BODY: MAIN PART Reasons for implementing minimum wages..  To reduce exploitation of lower paid workers √√  To decrease income inequality by boosting incomes of low income households. √√  To reverse the effects of employer discrimination √√  To encourage the more people to enter the workforce.√√he burden on the state to pay income support. √√ (8) Minimum wage D S 70 √√ (graph max 2 mark) 50 Wage rate 30 50 70 Quantity of labour in 1000s

10 Economics/P2 NSC- Memorandum NW/June 2017  Demand curve represents the quantity of workers demanded at each price. √√  Supply curve represents quantity of workers willing and able to supply their services at each price level. √√  Original market had an equilibrium of R50 and 50 000 workers offering their services√√  If minimum wage is set above R50 that is R70,the number of people employed would fall from 50 000 to 30 000√√  And number available to work would increase from 50 000 to 70 000√√  But those that are getting the job are receiving a more reasonable wage√√ (Discussion max. 6) Effect of a minimum wage.  Surplus labour being offered in the market. quantity supplied is greater than quantity demanded.√√  Wage rate increases in the market. √√  People are being paid a more equitable and fair wage for their services. √√  There is a fall in employment due to higher wage costs. √√  Risk of higher wage inflation due to firms having to increase their selling price to adjust to higher wage bill. √√  Damages the competitiveness of some firms due to higher cost of production. (max 12) (Max 26 Marks) BODY: ADDITIONAL PART  In addition, briefly discuss why the government intervenes in the market .(10)  Provision of goods and services. √√  State owned businesses are run by the state and provide goods and services to the public√√  State funding is used to provide public goods such as schools, hospitals√√  Government legislation√√  Parliament can pass laws that encourage competition and prohibit price fixing. √√  Ban the sale of some products such as drugs. √√  Acts to protect the rights of the employees√√  Fiscal policy interventions√√  Govt can increase the indirect taxes on products like liquor√√  Can provide subsidies to firms producing that positively affect communities.  Adjust welfare payments to certain individuals  Informing the market. √√  Government can inform the market, the actual cost and benefit of using certain products or services√√ (Any 5x2) (10) CONCLUSION (Accept any relevant conclusion)√√ (2)

11 Economics/P2 NSC- Memorandum NW/June 2017 [40] TOTAL SECTION C: 40 TOTAL 150