Economics Grade 12 Paper 1 Gauteng Mock 2016 Question Paper

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION 2016 10732 ECONOMICS SECOND PAPER TIME: 2 hours MARKS: 150 12 pages 1 P.T.O.

Downloaded from hlayiso.com ECONOMICS 2 (Second Paper) 10732 / 16 GAUTENG DEPARTMENT OF EDUCATION PREPARATORY EXAMINATION – 2016 ECONOMICS (Second Paper) TIME: 2 hours MARKS: 150 INSTRUCTIONS AND INFORMATION 1. Answer FOUR questions as follows in the ANSWER BOOK:  SECTION A: COMPULSORY  SECTION B: Answer any TWO of the THREE questions.  SECTION C: Answer any ONE of the TWO questions. 2. Answer only the required number of questions. Answers in excess of the required number of questions will NOT be marked. 3. Number the answers correctly according to the numbering system used in this question paper. 4. Write the number of the question above each answer. 5. Read the questions carefully. 6. Start the answer to each question on a NEW page. 7. Leave 2 – 3 lines between sub-sections of questions. 8. Answer the questions in full sentences and ensure that the format, content and context of your responses comply with the requirements of the questions. 9. Use only blue or black ink. 10. Non-programmable pocket calculators may be used. 11. Write neatly and legibly. P.T.O.

Downloaded from hlayiso.com ECONOMICS 3 (Second Paper) 10732 / 16 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 – C) next to the question number (1.1.1 – 1.1.8) in the ANSWER BOOK. 1.1.1 A patent which gives one the exclusive right to manufacture a product is characteristic of a / an … monopoly. A artificial B natural C local 1.1.2 A market which has major government influence and control can be described as being … A unregulated. B regulated. C deregulated. 1.1.3 The value of inputs owned by the entrepreneur and used in the production process is known as ... costs. A variable B explicit C implicit 1.1.4 As a rule, a firm should consider shutting down its business at the point where ... A MC = AVC. B MR = AC. C MC = MR. 1.1.5 A monetary measure to control inflation is ... A the tax rate. B the interest rate. C VAT. 1.1.6 The organisation responsible for marketing South Africa as a tourist destination is ... A SATOUR. B the Department of Tourism. C Tours in advance. P.T.O.

Downloaded from hlayiso.com ECONOMICS 4 (Second Paper) 10732 / 16 1.1.7 A strategy aimed at achieving the sustainable use and management of natural resources is referred to as … A condensation. B co-operation. C conservation. 1.1.8 The adoption of a specific range in which monetary authorities control the increase in prices is known as … A price hikes. B inflation targeting. C price control. (8x2) (16) 1.2 Choose a description from COLUMN B that matches an item in COLUMN A. Write only the letter (A – I) next to the question number (1.2.1 – 1.2.8) in the ANSWER BOOK. COLUMN A COLUMN B 1.2.1 Normal profit A An index that measures the price of a fixed “basket” of goods and services 1.2.2 Merit goods B When it is impossible to increase one’s 1.2.3 Pareto efficiency welfare without decreasing the welfare of another 1.2.4 Duopoly C Two businesses that have all the power in 1.2.5 Headline inflation a specific market 1.2.6 Indigenous D The number of organisms found within a Knowledge System specified geographic region (IKS) E Monopolists are seen as friendly to 1.2.7 Preservation competition 1.2.8 Biodiversity F To keep something intact G Average revenue = average cost H Normally under-produced in a market e.g. education I Traditional ways of doing that which is unique to a given culture or society (8x1) (8) P.T.O.

Downloaded from hlayiso.com ECONOMICS 5 (Second Paper) 10732 / 16 1.3 Identify the concept described in each of the following statements. Write only the term next to the question number (1.3.1 – 1.3.6) in the ANSWER BOOK. 1.3.1 The selling of goods or services to different buyers at different prices 1.3.2 Prices that are set below equilibrium price in the market and which allow the poor greater access to goods and services 1.3.3 The additional cost incurred when production is increased by one more unit 1.3.4 Low growth, high unemployment and high inflation rates occur simultaneously 1.3.5 South Africans travelling to other countries 1.3.6 The ability to satisfy the needs of the present generation without compromising the needs of future generations (6x1) (6) TOTAL SECTION A: 30 P.T.O.

Downloaded from hlayiso.com ECONOMICS 6 (Second Paper) 10732 / 16 SECTION B Answer TWO of the three questions from this section in the ANSWER BOOK. QUESTION 2 MICRO-ECONOMICS 40 MARKS – 30 MINUTES 2.1 Answer the following questions. 2.1.1 Name TWO segments (elasticities) of the kinked demand curve of the oligopolist. (2x1) (2) 2.1.2 How can a dominant firm in the oligopolistic market influence the price of goods? (1x2) (2) 2.2 Study the graph below and answer the questions that follow. EQUILIBRIUM IN A MONOPOLY MARKET LAC Price LMC Cost Revenue f 150 c g a 100 90 d 50 b MR DD/AR 50 60 Quantity 2.2.1 The above equilibrium position indicates a (short / long) run. (1) 2.2.2 Indicate the profit maximization point. (1) 2.2.3 Why will the monopolist produce at quantity 50 instead of quantity 60? (2x2) (4) 2.2.4 Calculate the profit or loss of this monopolist. Show ALL calculations. (4) P.T.O.

Downloaded from hlayiso.com ECONOMICS 7 (Second Paper) 10732 / 16 2.3 Read the article below and answer the questions that follow. Competition Commission raids glass companies in collusion investigation. The Competition Commission has begun an investigation into alleged collusive conduct involving Glasfit, PG Glass, Shatterprufe and Digicall. This is typical cartel behaviour. Shatterprufe allegedly supplied PG Glass and Glasfit with automotive glass, while Digicall processed automotive glass-related insurance claims on behalf of PG Glass and Glasfit. The investigation pertains to claims made by some independent glass fitment operations, alleging that PG Glass carried out collusive activities preventing competition in the automotive glass repair and fitment market. [Adapted from www. bdlive.co.za, 23 March 2016] 2.3.1 Name the organisation that investigates anti-competitive behaviour of companies in South Africa. (1) 2.3.2 What anti-competitive conduct was investigated, according to the extract? (1) 2.3.3 Briefly discuss the term cartel. (2) 2.3.4 What corrective measures can be instituted against these companies if they were found guilty? (2) 2.3.5 How can the collusive behaviour of these glass companies affect the economy? (2x2) (4) 2.4 Explain the reasons why a cost-benefit analysis is done when undertaking a project. (4x2) (8) 2.5 How can firms in a monopolistically competitive market increase their market share? (4x2) (8) [40] P.T.O.

Downloaded from hlayiso.com ECONOMICS 8 (Second Paper) 10732 / 16 QUESTION 3 CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 30 MINUTES 3.1 Answer the following questions. 3.1.1 Name TWO items excluded from the CPI basket of goods when calculating core inflation. (2x1) (2) 3.1.2 Why are some plants or animals listed as endangered? (1x2) (2) 3.2 Study the cartoon below and answer the questions that follow. THE EFFECT OF INFLATION ON WAGES Eish!!! This inflation is way above the target in South Africa. [Adapted https: // app.hedgeye.com / insights / 36953] 3.2.1 What is the inflation target in South Africa? (2) 3.2.2 What is cost-push inflation? (2) 3.2.3 What is the effect of inflation on wages? (2) 3.2.4 What can the government do to influence the impact of salary increases on inflation? (2x2) (4) P.T.O.

Downloaded from hlayiso.com ECONOMICS 9 (Second Paper) 10732 / 16 3.3 Read the article below and answer the questions that follow. Eskom factor – CO2 and climate change During the 2011 financial year, 93% of the electricity that Eskom produced was generated from coal-based power plants. These stations were built to utilise a low-cost and plentiful local resource and to be capable of burning lower-quality coal, leaving better coal for use by industry or as exports. However, using coal to generate electricity results in a significant environmental footprint. Greenhouse gas emissions from the electricity sector are estimated to be around 45% of South Africa’s emissions. When benchmarking Eskom’s carbon footprint against a set of seven leading developed and developing economies, Eskom ranks as the second-highest emitter of CO2. [Source:www.eskom.co.za] 3.3.1 What resource is mainly used to generate electricity in South Africa? (1) 3.3.2 How much is Eskom’s greenhouse contribution in South Africa? (1) 3.3.3 What is a carbon footprint? (2) 3.3.4 How do greenhouse gas emissions affect climate change? (2) 3.3.5 Why do you think it is difficult for Eskom to reduce its environmental footprint while still generating electricity for the country? (2x2) (4) 3.4 Explain the impact of inflation on debtors and creditors. (2x4) (8) 3.5 Why are chemical waste and hazardous waste two of the world’s biggest concerns in terms of environmental sustainability? (2x4) (8) [40] P.T.O.

Downloaded from hlayiso.com ECONOMICS 10 (Second Paper) 10732 / 16 QUESTION 4 MICRO-ECONOMICS & CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 30 MINUTES 4.1 Answer the following questions. 4.1.1 Name TWO characteristics of oligopolies. (2x1) (2) 4.1.2 What is the effect of competition on inflation? (1x2) (2) 4.2 Study the graph below and answer the questions that follow. NEGATIVE EXTERNALITIES – A CAUSE OF MARKET FAILURE Price and cost (R) D SMC1 SMC b P1 a P D Q1 Q Quantity 4.2.1 Which curve indicates the social cost to society? (1) 4.2.2 Give ONE example of a negative externality. (1) 4.2.3 Briefly describe the term market failure. (2) 4.2.4 Explain the impact of a positive externality on social benefits. (2) 4.2.5 Use the graph to explain why negative externalities will result in a surplus of goods being produced in the economy. (2x2) (4) P.T.O.

Downloaded from hlayiso.com ECONOMICS 11 (Second Paper) 10732 / 16 4.3 Study the picture below and answer the questions that follow. ENVIRONMENTAL SUSTAINABILITY LOOKING AHEAD IS THE KEY TO ECONOMIC GROWTH. DON’T LOOK BACK NOW. NATIONAL Do you call that PARK economic growth? [Adapted: google search: pollution cartoons] 4.3.1 Name TWO types of pollution evident in the picture. (2x1) (2) 4.3.2 What message is depicted in the cartoon? (2) 4.3.3 Briefly describe the term pollution. (1x2) (2) 4.3.4 How can the government intervene to ensure a cleaner environment? (2x2) (4) 4.4 Explain inefficiency in the economy as a consequence of market failure. (4x2) (8) 4.5 What effect do administrative prices have on consumer prices in South Africa? (4x2) (8) [40] TOTAL SECTION B: 80 P.T.O.

Downloaded from hlayiso.com ECONOMICS 12 (Second Paper) 10732 / 16 SECTION C Answer ONE of the two questions from this section in the ANSWER BOOK. MARK STRUCTURE OF ESSAY ALLOCATION Introduction Max. 2 Body  Main part: Discuss in detail / In depth discussion / Examine / Critically Max. 26 discuss / Analyse / Compare / Evaluate / Distinguish / Explain / Assess / Debate.  Additional part: Give own opinion / Critically discuss / Evaluate / Critically evaluate / Draw a graph and explain / Use the graph given and explain / Complete the given graph / Calculate / Deduce / Compare / Explain / Distinguish / Interpret / Briefly debate / How? / Max. 10 Suggest / Use the information and argue / Debate Conclusion Any relevant higher-order conclusion that should include:  A brief summary of what has been discussed / analysed without repeating facts already mentioned in the body  An opinion or value-judgement on the facts discussed Max. 2  Additional support information to strengthen the discussion / analysis  A contradictory viewpoint with motivation, if required  Recommendations TOTAL 40 QUESTION 5 MICROECONOMICS 40 MARKS – 40 MINUTES “Markets are broadly categorised into perfect and imperfect markets. However, in reality, very few examples of perfect markets exist.”  Examine in detail, the conditions of a perfect market. (26 marks)  Draw a clearly labelled graph which will show the profit made by the individual producer in the perfect market over the long term. (10 marks) [40] QUESTION 6 CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 40 MINUTES “Tourism is on the increase worldwide.”  Discuss the effects of tourism in detail. (26 marks)  How can domestic tourism be promoted in South Africa? (10 marks) [40] TOTAL SECTION C: 40 TOTAL: 150 END