Economic Management Sciences Grade 7 November 2018 Memo

Downloaded from hlayiso.com 1 TOM NEWBY SCHOOL EXAMINATION Subject Economic Management Examiner Miss L Klemp Sciences Miss B Botha Date November 2018 Total marks 150 Session 1 Duration 2 hours Grade 7 Moderator Mrs A Singh Special instructions/ 1. Read each question carefully and answer on the Equipment question paper. 2. Calculators may be used, but NO sharing is allowed. MEMORANDUM NO. ANSWER MARK LEVEL 1. Match the term from Column A, to the definition in 20 1 Column B. Write your answers in the blocks provided below Column A Column B 1.1 Deficit A. Goods available for sale. 1.2 Net Profit B. Businesses encourage consumers to buy their products. 1.3 Inventory C. The first evidence of a type of money. 1.4 Industrialised D. Refers to the profit that the Society business has made after all the expenses have been deducted from the gross income. 1.5 Cowry Shells E. How quickly an asset can be converted into money. 1.6 Liquidity F. The act of putting money aside for future use. 1.7 Consumer G. A society driven by the use of Behaviour technology to enable mass production. 1.8 Sustainability H. The amount by which a sum of

Downloaded from hlayiso.com 2 money is too small. . 1.9 Savings I. A method of banking in which transactions are conducted electronically. 1.10 Internet J. Avoidance of the depletion of Banking natural resources. 1.1 H √√ 1.2 D √√ 1.3 A √√ 1.4 G √√ 1.5 C √√ 1.6 E √√ 1.7 B √√ 1.8 J √√ 1.9 F√√ 1.10 I √√ 2. State whether the following statements are True or False. 5 2 2.1 Assets are the items that have monetary value and are owned by the business. True √ 2.2 Expenses are items which have no lasting value. True √ 2.3 Articles that sell slowly, have a low profit margin. False √ 2.4 Personal expenses can be referred to as living expenses. True √ 2.5 The Tertiary Sector uses raw materials from the Primary Sector to produce goods and services. False √ 3. Provide a term for the following definitions 10 3 3.1 A system of trade, whereby personal possessions of value could be exchanged for other goods. Bartering √√ 3.2 The money a business makes after deducting all the expenses from the income. Profit √√ 3.3 A decrease in financial value. Loss √√ 3.4 The money a business earns.

Downloaded from hlayiso.com 3 Income √√ 3.5 A financial action or event that takes place in a business. Transaction √√ 4. Answer the following questions 4.1 Explain the term personal expenses. 2 3 Personal expenses are everything people have to pay for in order to survive√√. 4.2 In the column below, list six types of personal expenses. 6 3 Rental expenses √ School fees √ Clothing √ Teachers / managers √ Petrol / transportation √ Medical expenses √ Telephone costs √ Water and electricity √ (Any 6) 5. Draw up a Statement of Net Worth. 15 6 The bank has asked Cynthia Harebottle for a Statement of Net Worth to assess if she qualifies for a personal loan. Cynthia has provided the following information in order to set up her Statement of Net Worth. Property R1 740 000 Mortgage loan R900 000 Clothing accounts R5 500 Household equipment R24 500 Credit card debts R25 000 Fixed deposit R6 200 Balance in bank account R1 340 Value of her: Cell phone R2 400 Laptop R8 000 Loan from cousin R2 500

Downloaded from hlayiso.com 4 Statement of Net Worth for Cynthia Harebottle√ Assets Property R1740 000 √ Household equipment R24 500 √ Fixed deposit R6 200 √ Bank balance R1 340 √ Cell phone R2 400 √ Laptop R8 000 √ Total R1 782 440 √ Liabilities Mortgage bond R900 000 √ Clothing accounts R5 500 √ Credit card debts R25 000 √ Loan from cousin R2 500 √ Total R933 000 √ Net Worth = R1 782 440 – R933 000 = R849 440 √√ 6. Answer the following questions: 6.1 List the five main types of capital. 5 2 Fixed capital / physical capital √ Financial capital √ Share capital √ Working capital / operating capital √ Start-up capital √ 6.2 In a short paragraph, explain the importance of a budget. 3 5 Budgets are important for financial planning √. The aim of a budget is to help you stay out of debt and to spend your money wisely √. A budget is also used to help you save money √. 6.3 Explain the difference between fixed and variable income. 2 5 Fixed: amounts that are received regularly. √ Variable: uncertain windfalls. √

Downloaded from hlayiso.com 5 7. Read the following information. Answer the questions that follow. Sugar and Spice is a small business that sells a variety of scarce ingredients needed by catering businesses. Their incomplete budget for October is listed below. The budget is based on October 2013 and September 2014. Sugar and Spice Budget – October 2014 Receipts of cash A Sales R400 250 Money earned from delivering stock R10 350 Payments of cash B Stock bought R200 000 Transport cost of getting stock to shop R1 500 Staff wages R20 000 Shop rental R8 000 Advertising costs R4 000 Surplus for the month C Money at the beginning of month R23 000 MONEY AT THE END OF THE MONTH D 7.1 Determine the answers for the missing calculations marked A 4x2=8 6 to D. A: R410 600 √√ B: R233 500√√ C: R177 100√√ D: R200 100√√ 7.2 If the sales for October 2013 were R250 000 and the sales for 2 5` September 2014 were R350 000, do you think R400 250 is a realistic amount to achieve for October 2014? Provide a reason for your answer. It is not unrealistic √, especially if they have information that a big order might come through, or a new client has signed up. √

Downloaded from hlayiso.com 6 7.3 Name any two expenses that you think would have also 2 3 increased, if sales increased by R50 000. Explain your answer. Thy stock that they have to buy √ Transportation costs √ 8. Answer the following questions. 8.1 Provide a detailed explanation of an entrepreneur. 2 3 People who take risks to start a new business √. They have specific characteristics and skills to be successful in their new ventures √. 8.2 List the four entrepreneurial actions 4 1 Buy √ Sell √ Produce √ Make a profit √ 8.3 Explain the term advertising. 1 3 To publicise a product. The activity of producing advertisements for commercial products and services √. 8.4 List the 4 “P”s of marketing and provide a brief explanation of 8 3 each. Product √ – what product are you selling? √ Price √ – is the price charged competitive? √ Place√ – where is the “shop” situated? √ Promotion √ – special deals available. √ 8.5 Provide a definition for the term socio-economic imbalance. 1 3 People do not have equal access to resources √. 8.6 Name and explain the two types of inequality 4 4 Inequality of income √: some people have a large income while others have a small or no form of income √.

Downloaded from hlayiso.com 7 Inequality of opportunity √: some people have opportunities or chances that other people do not have √. 8.7 Provide two reasons for the difference between income 2 4 Education and training √ Sexism √ Racism √ Nepotism √ Personal preference √ (Any two) 8.8 Explain the term production. 2 4 The process of making a good or service is known as production. √ Production is the process of taking raw materials and transforming them into useful goods and services. √ 8.9 List the three stages of production and provide an explanation 6 2 of each . Primary Stage√ : Natural resources are taken from the earth. √ Secondary Stage√ : products are manufactured from the natural resources. √ Tertiary Stage√ : Businesses provide a service rather than producing goods. √ 8.10 List the four groups of factors of production. 4 3 Natural Resources (land) √ Labour √ Capital √ Entrepreneurs √ 8.11 In paragraph form, give a brief explanation on the History of 5 5 Banks. Banking originated in Ancient Mesopotamia in 2000BC√ or the safekeeping of grains. √ People could withdraw their grain by writing out an ordered

Downloaded from hlayiso.com 8 instruction. √ Modern banks were established in the 17th Century. √ First National Bank started as the Eastern Province Bank in Grahamstown. √ 9. Read the case studies below and answer the questions for each. Case Study 1 9.1 What is the role of a manager? 2 3 Manager is a job title that is used in organisations to denote an employee who has certain duties and responsibilities / responsible for controlling or administrating any business/ organisation.√√ 9.2 Why is it necessary to treat customers in a polite manner? 1 2 In order to keep a good name for your business. √ Customers do not like to be treated rudely. √ 9.3 Elaine often changes the menu. Provide two reasons for why 2 3 this is good for their business. It keeps the customers interested. √ Customers may not have liked their previous menu options. √ Greater income and profit. √ (Any two) 9.4 Draw a business logo for Elaine and Sally’s restaurant. 5 4 Any appropriate logo - Picture - Colour - Relevant √√√√√ Case Study 2 9.5 What award did Pamela win? 1 1 Pamela won the Southern Life / Worldcom Young Business Award . √

Downloaded from hlayiso.com 9 9.6 Why do you think Pamela needed financial help with her 2 2 business? Although Pamela has a degree, she did not have the available funds to open her business. She needed capital to start her business √ and to supply her business with stock (medical supplies). √ 9.7 Do you think Pamela inspires her community? Provide a 2 3 reason for your answer. Yes, she does. √ She supports her community based on their needs and financial status. She has also shown that it is possible to follow your dreams and to start your own business. √ 9.8 Define the term perseverance. 2 3 Determination. Persistent to do something despite difficulty or delay. √ Case Study 3 9.9 In the block below, provide three differences between a formal 6 5 and informal business sector. Formal business Various forms of ownership √ Registered √ Pays tax √ Informal Does not have a permanent address √ Is not known by the government √ Does not pay tax √ 9.10 Motivate why people work in the informal sector. 3 5 • They cannot find employment in the formal sector. √ • They take part in illegal activities that they should not be involved in. √

Downloaded from hlayiso.com 10 • They do not want to pay tax. √ 9.11 What is the name of the teenager’s business? 1 1 Scentsations. √ 9.12 In a short paragraph, discuss the growth of their business 4 3 They started out in their mother’s kitchen. √ The teenagers then opened up a bigger production plant in a garage √ From there they created a business, Scentsations. √ They produce 75 kg of potpourri and they also introduced the product to various pharmacies. √