ABC HIGH SCHOOL
GRADE 12
ECONOMICS TERM 2 TEST
TOTAL: 100 MARKS
TIME: 1 HOUR/ 60 MINUTES
THIS QUESTION PAPER CONSISTS OF 7 PAGES
INSTRUCTIONS AND INFORMATION
1. Answer THREE questions as follows in the ANSWER BOOK:
SECTION A – COMPULSORY
20 MARKS
SECTION B – Answer any ONE question of the two questions
40 MARKS
SECTION C – Answer any ONE question of the two questions
40 MARKS
2. Answer only the required number of questions. Answers in
excess of the required number will NOT be marked.
3. Number the answers correctly according to the numbering system
used in this question paper.
4. Write the question number above each answer.
5. Read the questions carefully.
6. Start EACH question on a NEW page.
7. Leave 2 – 3 lines between subsections of questions.
8. 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.
9. Use only black or blue ink.
10. You may use a non-programmable pocket calculator.
11. Write neatly and legibly.
1
SECTION A (COMPULSORY)
20 MARKS – 12 MINUTES
QUESTION 1
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A – C) next to the question
number (1.1.1 – 1.1.5) in the ANSWER BOOK.
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
The additional cost when producing an extra unit is the:
A
Variable cost
B
Marginal cost
C
Total cost
Monopolistically competitive firms produce ____________ goods:
A
Identical
B
Different
C
Similar
Private costs + external costs equals:
A
Social costs
B
Internal costs
C
Total costs
Perfect competitive businesses in a long-run equilibrium make:
A
Normal profit
B
Economic profit
C
Economic loss
“i don’t meet competition, I crush it.” This statement was probably made
by a _____________.
A
Perfect competitor
B
Monetarist
C
Monopolist
(5 X 2)
2
(10)
1.2 Choose a description from COLUMN B that matches an item in COLUMN A.
Write only the letter (A – H) next to the question number (1.2.1 – 1.2.5) in the
ANSWER BOOK.
COLUMN A
COLUMN B
1.2.1
A
WTO
When two or more nations grant
equally advantageous trade
concessions to each other
1.2.2
Reciprocal trade
B
A market structure in which there are a
agreements
few sellers of a product and new sellers
cannot easily enter the market
1.2.3
Non-price
C
A market without any government
competition
1.2.4
Oligopoly
interference
D
The only international organisation that
deals with the global rules of trade.
1.2.5
Homogenous
E
Non-rivalry and non-excludable goods
F
An agreement between businesses to
limit competition between them
G
Characteristics of goods in perfect
markets
H
When firms do not compete on the
basis of prices so they have to find
other ways of encouraging customers
to buy their goods.
(5 X 1)
3
(5)
1.3 Give ONE term for each of the following descriptions. Write only the term next
to the question number (1.3.1 – 1.3.5) in the ANSWER BOOK.
1.3.1
Export promotion is a trade policy that encourages businesses to
increase exports by _______________.
1.3.2
Globalisation (only has advantages/ has many disadvantages) for
developing countries.
1.3.3
South Africa, Botswana, Swaziland, Lesotho, Namibia trader under an
agreement called _______________.
1.3.4
Occurs because firms do not provide all the goods and services that
consumers need.
1.3.5
Use by one person does not exclude use by others.
(5 X 1)
(5)
TOTAL SECTION A: 20 MARKS
4
SECTION B
Answer ONE of the two questions in this section in the ANSWER BOOK.
QUESTION 2: MONOPOLIES & OLIGOPOLIES
40 MARKS – 24 MINUTES
Figure: The relationship between the TR, AR and MR curves.
2.1
Look at the Figure above and answer the questions below.
2.1.1
Describe the relationship between MR and AR.
(4)
2.1.2
Describe the shape of the TR Curve.
(2)
2.1.3
Describe the shape of the MR and AR Curves.
(2)
2.1.4
Supply the revenue-maximising output.
(2)
2.1.5
Give the MR ant the revenue-maximising output.
(2)
2.2
Explain why the monopolist is a price-setter or price-maker.
(2)
2.3
What is significant about the price of a monopoly’s product or service
(4)
where MC=MR?
2.4
Give FIVE characteristics of the monopoly firm.
(10)
2.5
Explain a situation where the monopoly has no power.
(2)
2.6
Compare the price of goods produced by the monopolist and those
(6)
produced under perfect market conditions.
2.7
Why do cartels continue to exist in South Africa despite being illegal?
(4)
(40)
5
40 MARKS – 24 MINUTES
QUESTION 3: COST-BENEFIT ANALYSIS
Conduct a cost-benefit analysis based on the following case study. Note that fracking
(hydraulic fracturing) is the procedure of creating fractures in rocks and rock
formations by injecting fluid into cracks to force them further open.
Case Study: To frack or not to frack the Karoo
It has been reported that there are vast supplies of shale gas deep underground in the
Karoo. This is very important for an energy-poor country like South Africa, which has to rely
on expensive imported oil and coal that causes air pollution to generate electricity. As the
gas is in tiny pockets, it cannot simply be pumped out. First, the rock has to be fractured
(fracked). This process is done by pumping huge volumes of water and chemicals into the
rock. Where is this water to come from considering that water is so scarce in the Karoo?
There is always the danger of the chemicals escaping into the underground water during the
filling process and polluting the water supplies, thereby destroying the environment and the
farming economy. Those opposed to the idea of fracking believe that the long-term effects of
fracking are unknown the actual size of the deposits is just a guess and the well heads will
be a very unattractive feature on the surface. Those promoting the development talk of the
benefits of plentiful energy to the whole economy, large additional employment and lower
imports resulting in a more favourable balance on current account.
3.1
Identify FOUR possible external costs of the Karoo fracking
(8)
project.
3.2
Identify TWO social costs of the project.
(4)
3.3
Identify FOUR possible external benefits of the project.
(8)
3.4
Give TWO possible social benefits.
(4)
3.5
Name TWO private benefits of such a project.
(4)
3.6
Name the private costs that have to be counted in every
(4)
project.
3.7
Give your opinion on whether the fracking should go ahead.
(4)
3.8
Give TWO uses for cost-benefit analysis.
(4)
(40)
TOTAL SECTION B: 40 MARKS
6
SECTION C
Answer ONE of the two questions in this section in the ANSWER BOOK.
STRUCTURE OF THE ESSAY:
MARK ALLOCATION:
Introduction
Max (2)
Body:
Main part: Discuss in detail/In-depth discussion/Examine/
Max (26)
Critically discuss/Analyse/Compare/Evaluate/Distinguish/
Explain/Assess/Debate
Additional part: Give own opinion/Critically discuss/Evaluate/
Max (10)
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
Conclusion
Max (2)
TOTAL
(40)
40 MARKS – 24 MINUTES
QUESTION 4: PERFECT MARKET
Markets are broadly categorised into perfect and imperfect markets. However, in
reality very few examples of perfect markets exist.
1.
Examine the conditions of a perfect market in detail.
(26)
2.
Draw a clearly labelled graph to show economic profit for an individual
(10)
producer in the market.
(2 +26 +10 +2) (40)
40 MARKS – 24 MINUTES
QUESTION 5: PROTECTIONISM
Identify AND describe the different trade protection methods.
1.
Identification of trade protection methods.
(6)
2.
Description of trade protection methods.
(20)
(2 +26 +10 +2) (40)
TOTAL SECTION C: 40 MARKS
END OF QUESTION PAPER
TOTAL: 100 MARKS
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