Economics
REMOTE LEARNING ACTIVITY BOOKLET
(RELAB)
SUBJECT: ECONOMICS
GRADE: 11
2021
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ECON GRD 11 L B
A. INTRODUCTION AND PURPOSE OF THE RELAB
The COVID-19 pandemic has created the largest disruption of education systems in human history,
affecting over a billion learners in more than 200 countries. Closures of schools, institutions and other
learning spaces have impacted on the majority of the world’s student population. This has brought farreaching changes in all aspects of our lives. Social distancing and restrictive movement policies have
significantly disturbed traditional educational practices.
To control the coronavirus spread, most countries have been working to encourage parents and
schools to help students continue to learn at home through distance learning. In South Africa, the
implementation of a rotational timetable for non-matric learners has left a void in curriculum completion.
The Gauteng Department of Education (GDE) has therefore embarked on an innovative initiative to
develop learning activities to assist learners to continue their studies while at home through the Remote
Learning Activity Booklet, also known as RELAB. This is in keeping with its Strategic Goal 2 which
aims to promote quality education across all classrooms and schools.
The RELAB is underpinned by the following policies:
a) The Department of Basic Education (DBE) Circular S13 of 2020 which requires the GDE
to support the implementation of the Recovery Annual Teaching Plan (RATP); and
b) GDE Circular 11 of 2020 which requires districts to issue learning activity packs to support
schools for lockdown learning.
This is based on the premise that there are learning constraints at home whereby the majority
of learners do not have access to devices or data to use for online learning. Many households
are dependent on schools to provide them with learning resources packs.
RELAB is designed in a study guide format, where the content is explained briefly with related
concepts as revision in the form of e.g. notes, mind-maps and content progression from the
previous grade/s followed by exemplar exercises and practice exercises. The exercises are
pitched at different cognitive levels to expose Grade 10 and 11 learners to the different cognitive levels of questioning as outlined in the Curriculum and Assessment Policy Statement(CAPS).
The RELAB is intended to ensure that learners work on exercises based on topics or skills
taught while at school. These exercises must then be completed at home and feedback will
be provided by educators. Educators will then diagnose learner responses, remediate where
necessary and plan further intervention.
Educators are encouraged to create WhatsApp groups to remind learners of what is expected
of them in a particular week. The prudent use of the RELAB will help alleviate the backlog in
curriculum coverage and prepare learners for formal assessment.
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ECON GRD 11 L B
B. TABLE OF CONTENTS
3-5
6-7
8-9
TERM 2
1-2
3-4
5-6
7 -9
1-3
TERM 3
4-6
7-8
9 - 10
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MACROECONOMICS
TERM 1
1-2
TOPIC
MICROECONOMICS
WEEK
CONTEMPORARY ECON PURECON ISSUES
SUITS
TERM
SUBTOPIC/SECTION
PAGE
FACTORS OF PRODUCTION
5
CIRCULAR FLOW AND QUANTITATIVE ELEMENTS ECONOMIC GOODS AND SERVICES
ECONOMIC SYSTEMS
24
ECONOMIC STRUCTURES
57
RELATIONSHIPS BETWEEN MARKETS
71
COSTS AND REVENUES
82
PRICE ELASTICITIES
103
ECONOMIC GROWTH
123
ECONOMIC DEVELOPMENT
144
MONEY & BANKING
160
GLOBALISATION (NORTH/SOUTH DIVIDE)
171
ECONOMIC REDRESS ENVIRONMEMTAL
DETERIORATION
184
ECON GRD 11 L B
42
MACROECONOMICS -CONTENT PROGRESSION
TOPIC
BASIC CONCEPTS
THE ECONOMIC
PROBLEM
CIRCULAR FLOW
BUSINESS CYCLES
ECONOMIC SYSTEMS
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GRD 10
GRD 11
Economics, its methods and setting within
the field and its relationship with other sciences
Problems that all economies try to solve regarding the basic processes of production,
consumption and exchange, highlighting
the promotion or violation of human rights
and the environment.
Participants, markets, monetary and real
flows in an open economy.
GRD 12
Principles, processes and practices of the
economy. Factors of production and their
remuneration. Community participation Accessibility of the economically marginalised
groups.
Analysis of the economic structure of SA:
Sectors, infrastructure and exclusion and
discrimination in service provision and access to economic opportunity.
Analysis of the uses of economic goods
and services in relation to GDP/GNI and the
main aggregates: GVA, GNE and GNI.
Reasons for business cycles. Explanation
and illustration of their composition and noting their impact on the vulnerable
Characteristics and foundations of South
Africa’s mixed economy and assessing its
efficiency in terms of socio-economic services.
ECON GRD 11 L B
Presentation of the circular flow model as a
macroeconomic model: Deducing and analysing the national account aggregates: derive and apply the multiplier.
Analysis and explanation of business cycles
and how they are used in forecasting.
MACROECONOMICS
TOPIC 1: FACTORS OF PRODUCTION
FACTORS OF PRODUCTION
(WEEK 1 -2)
Analysis of the factors of
production and their
remuneration
Investigation of community
participation in local economic
planning and activities
Accessibility of the
economically
marginalised groups
MACROECONOMICS
1.
TOPIC 1: ECONOMICS – FACTORS OF PRODUCTION
INTRODUCTORY NOTES
• In macroeconomics we study the economy as whole.
• Economists represent the economy in the form of a circular flow model to show how the different participants (consumers, enterprises, the government and the foreign sector) in the
economy interact with one another.
• They all use scarce resources (factors of production) and try to solve the scarcity problem
(economic problem).
• It also studies aggregate (total) indicators such as the national income, national spending
and national production, total employment, general prices of goods and services and the
total money stock.
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ECON GRD 11 L B
KEY CONCEPTS:
KEY CONCEPTS
Break-even point
Capital
Capital deepening
Capital formation
Capital widening
Depreciation
Economic goods
Empowerment
Entrepreneur
Entrepreneurship
Factors of production
Free goods
Geographical mobility
Gross profit
In-service training
Interest
Investment
Labour
Marginalised people
Natural resources
Nominal wage
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DESCRIPTIONS/DEFINITIONS
The point at which expenses are equal to income
The money invested in machines and equipment that will be
used in the production process.
Occurs when the amount of capital per worker is increased.
An increase in a country’s stock of capital.
Occurs when the capital stock is increased to
accommodate an increasing labour force.
The decrease in the monetary value of assets over time
Resources that are scarce and that people are willing to pay for.
A management practice of sharing information, rewards, and
power with people so that they can take initiative and make decisions to solve problems and improve service and performance
The person who organises or employs natural resources, capital
and labour into a profitable business to produce useful goods
and services
The process of bringing together natural resources, capital and
labour into a profitable business to produce useful goods and
services
Basic inputs that are used to produce goods and services.
Those natural resources that are freely available in nature.
The movement of factors of production from one location to another location
The difference between sales and the cost of sales.
Training that takes place while a person is already employed
and doing a job.
The payment made for the use of capital in the process of production.
The creation of capital goods in the production of other goods
and services.
Includes all the work done by people whether they are skilled or
unskilled and whether they provide physical or mental work.
People who are less able to find a job or to satisfy their needs.
All means made available by nature to be used as inputs in the
production.
The amount that a worker receives each day, week or at the end
of the month.
ECON GRD 11 L B
KEY CONCEPTS
Non-renewable resources
Occupational mobility
Preferential
Procurement
Procurement
Procurement Policy
Profit
Real wage
Renewable resources
Rent
Wages and salaries
DESCRIPTIONS/DEFINITIONS
Resources that do not grow or develop as fast as they are used
such as minerals and fossil fuels.
The movement of factors of production from one type of productive activity to another type of productive activity
Is used to create opportunities for the marginalised such as
black-owned and women-owned enterprises by giving them preferences during the awarding of tenders.
The acquisition of goods and services
It is part of the BEE Act and it concerns awarding government
tenders to firms which comply with the BEE Act.
The remuneration that an entrepreneur receives for taking the
risk to run a business
The amount of goods and services that a person can buy with
the nominal wage
Resources that are replaced by natural processes such as
plants and animals
The payment for the owners of the natural resources for the use
of the natural resources in the production of goods and services.
The basic amount, excluding any benefit or allowances that are
paid in return for the use of labour in production.
FACTORS OF PRODUCTION & THEIR REMUNERATIONS
The factors of production are the basic inputs that are used to produce goods and
services. There are essentially four factors of production – natural resources, labour, capital
and entrepreneurship. Technological inventions form part of capital. The characteristics, importance and remunerations of the four factors of production are discussed below:
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ECON GRD 11 L B
Natural Resources
The money invested in machines and equipment that will
be used in the production process.
The process of bringing together
natural resources, capital and labour into a profitable business to
produce useful goods and services
• Resources are not evenly distributed
• Labour cannot separated from the
worker
• Capital may be tangible or intangible
• They take initiatives
• The supply is fixed/limited
• It cannot be stored or hoarded
• Capital is consumed
• They are gifts of nature
• It varies in quality and quantity
• Resources can be renewable or
non-renewable
• The supply cannot be suddenly increased.
• Capital increases production
efficiency
• They have to be transformed
• Serve as a source of food
• Provide opportunities for international trade
Remunerations
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Entrepreneurship
Includes all the work done by people whether they are skilled or unskilled and whether they provide
physical or mental work.
• Serve as inputs for production of
goods and services
Importance
Capital
All means made available by nature
to be used as inputs in the production
process.
Definitions
Characteristics
Labour
• Sustain economic activities
Rent
• They organise production
• They are innovative & prepared to
take risks
• Capital is expensive
• They have leadership and management ability
• Income as a goal
• Capital goods get worn out/depreciate
• Combines the other factors of production
• It is vital for economic development
• Makes mass production possible
• Combines the other factors of production
• The remuneration for labour accounts for more than 50% of the
GDP.
• Improves the quality of products
• Ensuring competitiveness
• Labour is complementary to other
factors of production.
Wages/Salaries
ECON GRD 11 L B
• Makes standardisation possible
• Encourage economic growth
• Create employment opportunities
• Makes selling on credit possible
• Create new wealth
Interest
Profit
INVESTIGATION OF COMMUNITY PARTICIPATION IN LOCAL ECONOMIC PLANNING
AND ACTIVITIES:
One of the goals of a modern community is to establish local economies that are economically
viable, environmentally sound and socially responsible. Achieving this goal requires participation from all sectors of the community, both to determine community needs and to identify and
implement innovative and appropriate solutions.
As stated in the Constitution of the Republic of South Africa, the local government has
the following objectives:
• To provide democratic and accountable government for local communities;
• To ensure the provision of services to communities in a sustainable manner;
• To promote social and economic development;
• To promote a safe and healthy environment.
Participation:
• Guarantees that a felt need is involved.
• Ensures things are done the right way.
• Uses valuable indigenous knowledge.
• Frees people from dependence on others’ skills.
• Makes people more conscious of the causes of their poverty and what they can do about it.
ACCESSIBILITY OF THE ECONOMICALLY MARGINALISED GROUPS
Marginalisation is the process whereby something or someone is pushed to the edge of a
group and accorded lesser importance.
Marginalisation can also be defined as those processes by which individuals and groups are
ignored or relegated to the side lines of political debate, social negotiation, and economic bargaining and kept there.
Conditions that should prevail as to be categorised in the economically marginalised
groups of South Africa:
•
•
•
•
Racial and gender discrimination
Physical and mentally handicapped persons
People from rural areas as well as school leavers
Refugees and most poor people with language and education barriers.
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ECON GRD 11 L B
Marginal groups consist of people who do not form part of, or who are excluded from, the economic mainstream.
• These people often do not have a job, housing, education opportunities or access to medical
and other facilities.
• Examples will be the elderly, school-leaving youths, refugees, the disabled and the poor.
How does the government intervene as to improve the situation of economically marginalised groups?
• Through empowerment and procurement.
• Empowerment gives somebody the power or authority to access resources and opportunities.
• Procurement is the acquisition (purchase) of goods and/or services.
The following are some of the strategies that the government implement to address socio-economic inequality and alleviate the difficulties of economically marginalised groups;
The Expanded Public Works:
• Programme is the largest job-creating initiative undertaken.
The National Youth Agency:
• Aims to help people between the ages of 16 and 25 who want to continue their education by
providing them with part-time jobs.
• Entrepreneurship grants and skills development through 27 SETA’s
The Broad Based Black Economic Empowerment Policy:
• Provides a basis for transforming the South African economy to eradicate inequality.
Human Resource Development Strategy:
• Was implemented to reduce the levels of poverty, unemployment and inequality.
The Integrated Sustainable Rural Development Strategy:
• Is designed to realize a vision that will attain socially cohesive and stable rural communities
with viable institutions, sustainable economies and universal access to social amenities, able
to attract and retain skilled and knowledgeable people, who are equipped to contribute to
growth and development.
Anti-poverty initiates and programmes:
Such as a well-developed social grants system and better service delivery to the poor.
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ECON GRD 11 L B
QUESTIONS
SECTION A: TYPICAL EXAM QUESTIONS
FACTORS OF PRODUCTION
QUESTION 1:
Section A – Short Questions
TIP: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 Factors of production are:
A
inputs into the production process.
B
weather, social, political conditions that affect, production.
C
the physical relationships between economic inputs and outputs.
D
the ownership of the factors of production is not important for households.
1.1.2 The remuneration or payment made for the use of factors of production which
are limited in supply is called …
A
economic rent.
B
rent.
C
commercial rent.
D
interest.
1.1.3 Resources are called ... in the production process.
A
B
C
D
inputs
outputs
intermediate goods
final goods
1.1.4 The supply of land is …
A.
B.
C.
D.
elastic
inelastic
mobile
sufficient
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ECON GRD 11 L B
1.1.5 Fauna and Flora are examples of ... resources.
A
renewable
B
non-renewable
C
fixed
D
limited
1.1.6 The ... combines all other factors of production to produce goods and
services to satisfy the needs of the consumers.
A
B
C
D
labourer
entrepreneur
government
minister
1.1.7 The South African labour force is characterised by ...
A
B
C
D
skilled labour.
unskilled labour.
highly skilled labour.
unemployed labour
1.1.8 Factory buildings are examples of … capital.
A
floating
B
working
C
fixed
D
variable
1.1.9 The amount that a resource could earn from its next best use is known to as …
A
economic rent.
B
transfer earnings.
C
economic profit.
D
commercial profit.
1.1.10 The most important asset of a country is its … resources.
A
capital
B
human
C
natural
D
free
1.1.11 The greatest threat to workers’ health in South Africa is …
A
pneumonia.
B
tuberculosis.
C
HIV and Aids.
D
low wages.
1.1.12 Purchasing from BEE-qualifying businesses, small businesses and
black owned businesses is known as….
A
ownership.
B
preferential procurement.
C
management.
D
empowerment.
(12 x 2) (24)
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ECON GRD 11 L B
1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-L) next to the question number (1.2.1 – 1.2.11) in the
ANSWER BOOK.
COLUMN A
1.2.1 Goods and
services
1.2.2 Factors of
production
1.2.3 Land
A
B
C
1.2.4 Economic activity D
1.2.5 economic rent
E
1.2.6 economically
active population
1.2.7 Division of
Labour
F
1.2.8 Physical capital
1.2.9 wages and
salaries
H
1.2.10 money capital
K.
1.2.11 Marginalisation
L
1.3
G
I.
COLUMN B
The process whereby something or someone is pushed
to the edge of a group and accorded lesser importance,
this is predominantly a social phenomenon by which a
minority or sub-group is excluded, and their needs or
desires ignored.
is made possible by the availability of natural
resources.
dividing the process of production into distinct and several
component processes and assigning each component in
the hands of a labourer or a set of labourers, who are
specialists in that particular process.
The quantity of labour depends on the size of the
population and the proportion of the population that is able
and willing to work.
All man-made physical assets like plant and machinery,
tools, buildings, roads, dams and communication, etc.,
are the various forms of physical capital.
Refer to those goods and services which help in the
production process.
Any and all particular geographical locations, mineral
deposits, forests, water, arable land, sun-shine, fish stocks,
atmospheric quality etc.
They cannot be produced without any human input.
The remuneration received from the sale of a factor of
production which is scarce.
The investment that is made in the form of money or
monetary instruments is called.
The remuneration received for the supply of labour by
households.
(11 x 1) (11)
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
HINT: Learners must know their concepts well, as this will assist in a better
understanding of the content in general. Leaners are encouraged to revise
with these type of questions, that are found in Section A of the paper
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ECON GRD 11 L B
1.3.1 The driving force behind production in a market economy.
1.3.2 Gross profit plus all other income minus all expenses the business has to pay to keep
it running.
1.3.3 The society’s understanding of the best ways to produce goods and services.
1.3.4 Accumulation of more and more physical capital.
1.3.5 The amount that a worker receives each day, week or at the end of the month.
1.3.6 The decrease in the monetary value of assets over time.
1.3.7 They have the ability to recognise new business opportunities, invent new methods of
production, successfully establish new markets and initiate growth by providing new job
opportunities.
1.3.8 The resources that are scarce and that people are willing to pay for.
1.3.9 Training that takes place while a person is already employed and doing a job.
1.3.10 Those processes by which individuals and groups are ignored or relegated to the side
lines of political debate, social negotiation, and economic bargaining and kept there.
1.3.11 The payment for the owners of natural resources for the use of the natural resources
in the production of goods and services.
(11 x 1) (11)
SECTION B
SECTION B: TYPICAL EXAM QUESTIONS
QUESTION 2:
HUNT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
List any TWO examples of non-renewable resources.
(2 x 1) (2)
Name any two main economic activities in modern society
(2 x 1) (2)
Name any TWO broad categories of labour
(2 x 1) (2)
Name TWO examples of capital goods.
(2 x 1) (2)
Name TWO factors which must be present to enable a country to make use
of its natural resources.
(2 x 1) (2)
Name any TWO components of capital
(2 x 1) (2)
Name TWO factors that influence the labour force participation rate
(2 x 1) (2)
List any TWO forces that determine interest rates.
(2 x 1) (2)
Name any TWO strategies that the government implement to address
socio-economic inequality.
(2 x 1) (2)
Name TWO factors that influence the labour force participation rate.
(2 x 1) (2)
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ECON GRD 11 L B
QUESTION 3:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
Why is the supply of land fixed?
(1 x 2) (2)
Why is it important for government to use the procurement system?
(1 x 2) (2)
What will happen to the rent on land that is situated far from the market, if the
government builds a railway line to connect the farmer to the market?
(1 x 2) (2)
3.4
What do we mean when we say that labour is heterogeneous?
(1 x 2) (2)
3.5
Why is the quality of labour more important than the quantity of labour?
(1 x 2) (2)
3.6
Since natural resources are scarce, what would be your suggestion as to
how they should be used?
(1 x 2) (2)
3.7
Why is it that land and labour are referred to as primary factors of production?
(1 x 2) (2)
3.8
How does the government use procurement to distribute wealth?
(1 x 2) (2)
3.9
How does a high level of education influence the ability of an individual
to get employed?
(1 x 2) (2)
3.10 What effect will HIV/Aids have on supply of labour?
(1 x 2) (2)
3.11 What impact does the Expanded Public Works Programme have on your
local community?
(1 x 2) (2)
3.12 How effective is local government in promoting the role of community participation?
(1 x 2) (2)
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ECON GRD 11 L B
DATA RESPONSE
All section B questions have TWO data interpretation questions –
each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document.
QUESTION 4
4.1
Study the cartoon below and answer the questions that follow
4.1.1 What is depicted by the cartoon above?
(1)
4.1.2 Which factor above requires the willingness and ability to combine the other
three factors for production to take place?
4.1.3 Describe the term entrepreneur.
(1)
(2)
4.1.4 How does the market reward an entrepreneur and punish an entrepreneur?
(2)
4.1.5 Why do we need entrepreneurs in the economy of South Africa?
(2 x 2) (4)
[10]
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ECON GRD 11 L B
4.2 Study the information below and answer the questions that follow.
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
What factor of production is represented in the above extract?
(1)
Who is the current Minister of Water and Sanitation?
(1)
Describe the term natural resources.
(2)
What was the aim of the 2016 Water Week?
(2)
What is the impact of scarcity on renewable and non-renewable resources? (2 x 2) (4)
[10]
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ECON GRD 11 L B
4.3 Study the graph below and answer the questions that follow.
4.3.1 List ONE factor that can influence rent.
(1)
4.3.2 What do we call the rent charged for the exploitation of mines?
(1)
4.3.3 Briefly describe the term economic rent.
(2)
4.3.4 Explain why the supply of land is fixed.
(2)
4.3.5 Calculate the economic rent according to the graph? SHOW ALL CALCULATIONS.
(4)
[10]
4.4
Study the image given below and answer the questions that follow.
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ECON GRD 11 L B
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
According to the above image, what is the demand of the workers?
Mention any ONE characteristics of labour
Describe the term labour.
What is the difference between nominal wages and real wages?
How can the productivity of labour be improved?
 









4.5
Study the table below and answer the questions that follow.
(1)
(1)
(2)
(2)
(2 x 2) (4)

[10]
[Source: Statistics South Africa]
4.5.1 Which institution is responsible to publish the information depicted on the table
above?
(1)
4.5.2 In which year was employment at its highest?
(1)
4.5.3 What trend do you observe in the working age population from the table?
(2)
4.5.4 Explain the term Not Economically Active
(2)
4.5.5 Calculate the unemployment rate for 2011 (Show ALL calculations).
(2 x 2) (4)
[10]
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ECON GRD 11 L B
4.6
Study the graph below and answer the questions that follow.
4.6.1 Identify the market equilibrium for labour in the graph.
(1)
4.6.2 According to the above graph, how are wages determined in the labour
market?
(1)
4.6.3 Briefly describe the term labour?
(2)
4.6.4 Explain how HIV and AIDS affect the quality of labour.
(2)
4.6.5 How does the National Development Plan propose to increase employment
and economic growth?
(2 X 2) (4)
[10]
4.7
Study the illustration below and answer the questions that follow.
4.7.1 Classify the type of labour that is performed by person B.
4.7.2 Under which of the categories above (A, B or C) would you classify the bulk of
South Africa’s labour force?
4.7.3 Describe the term specialisation of labour.
4.7.4 Briefly explain any ONE characteristic of labour.
4.7.5 Why would you regard labour as an important factor of production?
(1)
(1)
(2)
(2)
(2 x 2) (4)
[10]
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ECON GRD 11 L B
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
Paragraph type questions – Middle Cognitive
QUESTION 5
TYPICAL EXAM QUESTIONS
5.1 Briefly explain the availability and use of factors of production as methods of growing the
economy.
(8)
5.2 Discuss the economic significance of land.
(8)
5.3 Differentiate between ‘capital widening’ and ‘capital deepening’ as importance of capital.
(8)
5.4 Briefly explain any TWO factors that influence the profit of an entrepreneur.
(8)
5.5 Explain uneven distribution and the fixed supply as characteristics of natural resources.
(8)
5.6 Discuss FOUR characteristics of capital.
(8)
5.7 Discuss the entrepreneur as a creator of employment and ensuring competition.
QUESTION 6
(8)
Paragraph type questions – Higher cognitive
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge, through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
6.1 Why is capital formation important to the South African economy?
6.2 Why is it difficult to change the real capital?
6.3 How do the natural resources enrich our lives?
6.4 How can community participation impact on the entrepreneur?
6.5 Analyse the government's effort to assist the economically marginalised groups in
South Africa.
6.6 How successful has the government been in creating opportunities for previously
disadvantaged individuals through empowerment?
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ECON GRD 11 L B
(8)
(8)
(8)
(8)
(8)
(8)
SECTION C
ESSAY TYPE QUESTIONS
TYPICAL EXAM QUESTIONS
All section C questions have TWO questions 5 & 6 NOT like in this document. In
the examination you will need to answer only one Essay.
ESSAY STRUCTURE
: Section C – the essay question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION:
STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
• A good starting point would be to the main concept related to the
question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically
discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/
How/ Suggest/ Construct a graph
Conclusion
Any Higher or conclusion include:
• A brief summary of what has been discussed without repeating facts
already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max 2
Max 26
Max 10
QUESTION 7
• Discuss in detail the characteristics of capital.
• Examine the positive effects of capital deepening.
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Max 2
40
(26)
(10)
ECON GRD 11 L B
QUESTION 8
• Discuss the economic importance of entrepreneurship.
(26)
• Critically evaluate how the South African government promotes entrepreneurship (10)
QUESTION 9
•
•
Discuss the characteristics of labour.
(26)
With the aid of a graph, show how an increase in demand will affect rent for land.(10)
QUESTION 10
• Discuss land as one of the four factors of production with special reference to:
- Characteristics
- Economic significance
- Remuneration.
(26)
• Examine how the government can use empowerment as a strategy that the government
implement to address socio-economic inequality and alleviate the difficulties of
economically marginalised groups.
(10)
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MACROECONOMICS
TOPIC 2: CIRCULAR FLOW AND QUANTITATIVE
ELEMENTS ECONOMIC GOODS AND SERVICES
(WEEKS 3 -5)
INTRODUCTORY NOTES
A circular flow model is a model that shows how participants (households, businesses,
government and foreign sector) in an economy interact. Our model equation is therefore:
C + G + I + (X – M).
Now each of the components on our equation are going to be discussed in depth for
clearer understanding.
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KEY CONCEPTS
KEY CONCEPTS
Intermediate goods
DESCRIPTIONS/DEFINITIONS
Goods that are not directly consumed but that are used to
manufacture other goods
Final goods and services All manufactured goods that are ready to satisfy the consumers’ needs and wants
Economic goods
Resources that are scarce and that people are willing to pay
for.
Free goods
Those natural resources which are freely available in nature.
Gross domestic product Total value of final output of goods and services produced
within the borders of a country in a year.
Gross National product
Total value of final output of goods and services produced
by the permanent residents of a country in a year.
Gross fixed capital forTakes place when there is an increase in the country’s capimation
tal stock.
Gross Value Added
The value added by each firm during the production process.
Market price
The current price at which a good or service may be bought
or sold
Basic price
The price of a good or service minus subsidies
Factor cost
The total cost of all the factors of production consumed or
used in producing of a good or service
Tax on products
Any tax that is levied per unit of the good or service and includes VAT, import duties, taxes on imports & exports etc.
Tax on production
Any tax on production not linked to a specific good or services and includes payroll taxes, business licenses, and
taxes on land and buildings etc.
Subsidies on products
These are direct subsidies that are made per unit of the
good or services and are linked to a specific product e.g.
government subsidy on bread
Subsidies on production These are subsidies that are not linked to a specific goods
or services e.g. subsidy made on employment.
Residual item
Refers to errors and omissions incurred in the calculation of
GDP
Inventory
The merchandise, raw materials, finished and unfinished
products which have not yet been sold
Transfer payments
Payments made by the government to people who have not
used their factors of production to produce output such as
welfare grants.
Semi-durable goods
Goods that can be used repeatedly or continuously over a
period longer than a year their expected lifetime of use,
though longer than a year, is often significantly shorter and
that its purchasers’ price is substantially less
GDP at Factor cost:
Money value of the cost of employment, entrepreneurship
and the depreciation of capital in South Africa, without
counting Government’s role in it
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DEFINITION OF FINAL CONSUMPTION EXPENDITURE (C)
Consumption expenditure (spending) is the amount of money spent by households in
an economy.
The spending includes durables, such as washing machines, semi-durables and nondurables, such as food. In other words, it is the purchasing of goods and services by
individual households.
It is the largest part of aggregate demand at the macroeconomic level.
The total spending of all households on consumer goods and services is called total or
aggregate consumption expenditure, or simply total consumption
There are two components of consumption in the basic model: induced consumption
(which is affected by the level of income) and autonomous consumption (which is not;
in other words, it is expenditure that occurs when income levels are zero).
Autonomous consumption contrasts with induced consumption, in that it does not
systematically fluctuate with income, whereas induced consumption does.
The two are related, for all households, through the consumption function:
• C = c0 + c1 yd where
• C is total consumption,
• C0 is autonomous consumption (c0 > 0),
• C1 is the marginal propensity to consume
• YD is disposable income.
Household final consumption expenditure includes the following components:
• households' purchases of durable goods
• households' purchases of non-durable goods
• households' purchase of semi-durable goods
• households’ expenditure on services rendered to them
CONSUMPTION EXPENDITURE BY GOVERNMENT (G)
The primary function of government is to establish the framework within which the
economy operates. Government also participates in the circular flow of production, income and spending. It purchases factors of production (primarily labour) from households
on the factor market and also purchases goods and services from firms on the product
(goods) market. In return, government provides households and firms with public goods
and services such as defense, law and order, education, health services, roads and
much more. This spending by government is usually denoted by the symbol G.
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Composition / Classification of Government Spending
Economic affairs
• Economic infrastructure and network regulation
• Industrial development, trade and innovation
• Employment, labour affairs and social security funds
Debt service costs
General public services
• General public administration and fiscal affairs
• Executive and legislative organs
• Home affairs
• External affairs and foreign aid.
Education
• Basic education
• University transfers
• Skills development and adult education
• Education administration
• National student financial aid scheme.
Health
• District health services
• Provincial hospital services
• Other health services
• Central hospital services
• Facilities management and maintenance
Local development and social infrastructure
• Municipal equitable share and infrastructure grant
• Human settlements, water and electrification programmes
• Public transport
• Other local development and social infrastructure
• Rural development and land reform
Social protection
• Old-age grant
• Child support grant
• Disability grant
• Provincial social development
• Other grants
• Policy oversight and grant administration.
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IMPORTANCE OF GOVERNMENT SPENDING (G):
Government expenditure plays an important role in determining the changes in the
level of national income; providing the right needs for potential output and sustaining the
welfare of the economy.
the circular flow of income helps identify the key relationship of government expenditure towards household and domestic firms, which is when income rises, spending
rises, and when spending rises, output rises which [then again] gives rises to incomes providing growth in national income.
Households, firms, and foreign sectors (on exports) pay taxes with their incomes,
which generate overall revenue for government expenditure.
FLOW OF INCOME
Figure 1.1
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Circular flow diagram
ECON GRD 11 L B
IMPORTANCE OF GOVERNMENT SPENDING
Government spending is autonomous, and therefore will spend regardless of the size of
revenue, emphasising potential leakages in the circular flow of income and the changing
pace of economic growth. For example, tax revenues do not equal government spending
in public goods. Some revenue may be set aside for savings or used to pay back bonds
to reduce national debt.
This presents a leakage in the circular flow, as incomes generated do not finance current
goods and services. Furthermore, taxes reduce the disposable incomes in households
and profit in firms presenting a withdrawal (leakage)in the flow.
When leakages are greater than injections, the national output will fall to a new
equilibrium, as there will be less income circulating and change the pace of economic
growth.
On the other hand, when government injections rise, national output will move to a new
equilibrium. Therefore, injections must equal leakages for an economy to be in equilibrium, emphasising the different positions of equilibrium growth and the varying conditions
COMPOSITION OF THE CIRCULAR FLOW
Intermediate goods are goods that are not directly consumed but that are used to manufacture other goods.
Final goods are all manufactured goods that are ready to satisfy the consumers’ needs
and wants.
Final consumption expenditure by households is the total spending of all households
on final goods and services for a specific period usually one year.
Consumption expenditure by government is the amount spent on goods and services
to meet the needs and wants of as many people as possible in a country.
Gross fixed capital formation refers to goods that are bought by firms and government
to produce other goods and services.
Gross Domestic Product
The GDP is the total value of final goods and services produced within a country in a certain period of time, which is usually a year.
The national accounts are useful for:
•
•
•
•
Indicating the economic activity within a country
Measuring economic growth from one year to the next
Determining the standard of living in a country
Comparing prosperity levels among the country
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GDE - Gross Domestic Expenditure
GDE is the total expenditure of all sectors of an economy of a country on final goods
and services produced in that country.
Consumers and the government spend money on Consumer goods and services.
Firms and the government spend money on capital goods. The formula for calculating
GDE is GDE = C + I + G.
C = represents consumer expenditure
I = represent investments (spending by businesses)
G = represents government spending
Gross National Product (GNP)
Gross National Product (GNP) is the total market value of the final output of the factors of
production owned by the citizens of a country irrespective of where they are located for a
certain period of time (usually a year).
Conversion of GDP figures to GNI figures:
GDP at market prices
Plus: Factor income earned abroad by South Africans
Less: Factor income earned in South Africa by
foreigners
= GNI at market prices
Theoretically, national production, national expenditure and national income should all be
equal. This allows GDP to be calculated by using any of the following methods:
Income Method/GDP (I):
This method calculated GDP using the total income received by the owners of the factors
of production that were used to produce products. GDP (I) = W + R + I + P
W = represents wages and salaries
R = represents rent income
I = represents interests
P = represents Profits
Expenditure Method/ GDP (E): uses the amount of money domestic businesses receive
for their production to calculate the value of final output. The expenditure method uses
the following formula to calculate GDP:
GDP (E) = C + I + G + (X – M)
C = represents consumer expenditure
I = investments (spending by businesses)
G= represents government spending
X = represents exports (spending by people in other countries on local products)
M = represents imports (spending by the local people on foreign products)
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ECON GRD 11 L B
Take note: M must be subtracted as these finals goods and services or output was produced in a foreign country and can therefore not be added to local GDP.
Production Method/ GDP (P): This method calculates GDP by adding the value of the
final goods and services produced in each sector of the economy (primary, secondary
and tertiary).
It is also known as the value added method or GVA (Gross Value Added) as the value
of a product while being produced has to be added at each stage of the production process until the final product is reached.
EXPENDITURE METHOD
consumption expenditure
by households (C)
gross capital formation (I)
consumption expenditure
by general government (G)
Gross domestic expenditure
plus: exports (X)
less: imports (M)
Expenditure on GDP at
market prices
PRODUCTION METHOD
value added by the primary
sector
value added by the secondary sector
value added by the tertiary
sector
GDP at basic prices
INCOME METHOD
compensation to employees
plus: taxes on products
less: subsidies on products
Gross domestic product
at market prices
plus: taxes on production
less: subsidies on production
GDP at basic prices
consumption of fixed capital
operating surpluses
GDP at factor cost
plus: taxes on products
less: subsidies on products
Gross Domestic Product at
market
plus: primary income from the
rest of the world
less: primary income to the
rest of the world
Gross National Income at
market prices
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QUESTIONS
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
: When answering Section A – short question, it is important not to rush but
to read the questions carefully and to make sure you understand what the
question is asking. Always remember one alternative is completely wrong,
one is nearly correct and one is totally correct. It is easy to eliminate the completely
wrong answer, but if you do not read the question carefully the nearly correct answer
will also appear correct. The answer will NEVER be two options. Only ONE option is
correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 The total value of remuneration that the owners of factors of production receive
for their share in the production process for a specific period of time:
A
GDP
B
GNI
C
GNP
D
GNE
1.1.2 Double counting is a problem that occurs when the … method of calculating GDP
is used.
A
production
B
income
C
expenditure
D
domestic
1.1.3 Consumption of fixed capital means …
A
depreciation.
B
gross salaries and wages.
C
investment.
D
capital.
1.1.4 … includes all possible errors that could have been made in the calculation of the
expenditure items.
A
B
C
D
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Constant prices
Gross capital formation
Residual items
Market prices
ECON GRD 11 L B
1.1.5 An alternative concept for gross value added is gross …
A
national product.
B
domestic product.
C
national income.
D
national expenditure.
1.1.6 Spending on education and housing by the government is classified under the …
division of government expenditure.
A
functional
B
administrative
C
financial
D
classification
1.1.7 Double counting is a problem that occurs when the … method of calculating GDP
is used.
A
production
B
income
C
expenditure
D
domestic
1.1.8 To convert basic prices to market prices, taxes on products must be …
A
deducted.
B
multiplied.
C
added.
D
divided
1.1.10 In South Africa’s national accounts final consumption expenditure refers to
expenditure by…
A
tourists.
B
households.
C
business.
D
foreigners.
(10 x 2) (20)
1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-K) next to the question number (1.2.1 – 1.2.10) in the
ANSWER BOOK.
CONCEPT
1.2.1 Gross value added
at basic prices
1.2.2 Capital deepening
1.2.3 Transfer payments
1.2.4 Durable goods
1.2.5 Autonomous consumption
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DESCRIPTION
A
Takes the form of social security such as pensions
and disability grants.
B
Takes place when firms build up their stock of
finished products
C
Expenditure which is not affected by level of income
D
Goods and services whose provision has
benefits for the user and society
E
The flow of goods and services between the
participants in the circular flow
ECON GRD 11 L B
1.2.6 Inventory investment
F
1.2.7 Merit goods
G
1.2.8 Gross Domestic
Product
1.2.9 Old age-pensions
1.2.10 Real flow
H
I
J
K
1.3
The total market value of all final goods and
services produced between the borders of a
country over a specific period of time.
Goods that derive their name from the fact that they
last in value for a relatively long
Transfer payments by the state to support the
elderly
Increases at a rate of increase of the work force.
GDP at basic prices, plus taxes on products, minus
subsidies on products.
The total domestic and foreign income claimed by
citizens of a country
(10 x 1) (10)
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 Counting the contribution of a factor of production more than once.
1.3.2 Total market value of all final goods and services produced by the permanent
citizens of a country for a specific period.
1.3.3 A method whereby we determine the GDP at market prices by adding the
spending of the four main sectors.
1.3.4 Total market value of all final goods and services produced within the borders of a
country for a specific period which took into consideration the effects of price
changes/inflation.
1.3.5 Goods which can be consumed only once, and they cease to exist after being
used.
1.3.6 Cannot be used to measure real economic growth due to the effect of inflation.
1.3.7 Subsidies that are linked to specific goods or services e.g. government subsidy on
bread.
1.3.8 The total market value of all final goods and services produced within the borders
of a country over a specific period of time.
1.3.9 The services sector of an economy.
1.3.10 Goods which can be used more than once but they last for a shorter period of time
e.g. clothing.
1.3.11 Takes place when firms build up their stock of finished products.
1.3.12 Compulsory payments made by private individuals or businesses to the
government sector with no direct benefit.
1.3.13 subsidies that are not linked to specific goods or services e.g. subsidy made on
employment.
1.3.14 Taxes that are linked to specific goods or services.
(14 x 1) (14)
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ECON GRD 11 L B
SECTION B
QUESTION 2:
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
Name TWO economic participants that are responsible for gross fixed capital
formation.
(2 x 1) (2)
List TWO main economic sectors when calculating GDP (P).
(2 x 1) (2)
Name any TWO participants in a closed economy.
(2 x 1) (2)
Name any TWO examples of taxes on products.
(2 x 1) (2)
Name any two main categories of final consumption expenditure by government.
(2 x 1) (2)
List any TWO main economic activities in modern society
(2 x 1) (2)
Name any TWO methods of calculating GDP.
(2 x 1) (2)
List any TWO economic leakages
(2 x 1) (2)
Name TWO types of assets into which Gross fixed capital investment is
divided into.
(2 x 1) (2)
QUESTION 3:
TIP:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that their answer addresses the question asked
3.1
Why do national accountants use the value-added method to calculate GDP?
(1 x 2) (2)
3.2
Why is the households the ones who get paid for land, labour, capital and
entrepreneurship and not government or firms?
(1 x 2) (2)
3.3
What happens to household spending on final goods and services during an
economic recession?
(1 x 2) (2)
3.4
Why is the gross domestic product of South Africa always greater than the gross
national product?
(1 x 2) (2)
3.5
Why do National accountants convert Nominal GDP to GDP at constant prices?
(1 x 2) (2)
3.6
Why is the spending of households on final goods and services important?
(1 x 2) (2)
3.7
Why are capital goods regarded as final goods?
(1 x 2) (2)
3.8
Why are imports not included in domestic expenditure?
(1 x 2) (2)
3.9
Why is fixed capital formation important?
(1 x 2) (2)
3.10 Explain how consumption stimulates employment.
(1 x 2) (2)
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DATA RESPONSE
: All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4
4.1 Study the table below and answer the questions that follow.
4.1.1 Give an example of a primary income from the rest of the world.
4.1.2
4.1.3
4.1.4
4.1.5
Do we add a subsidy to the basic prices or subtract it?
Briefly describe the concept Gross Domestic Product.
Explain the difference between current prices and constant prices.
Calculate the value of A in the table. (Show all calculations)
4.2
Study the table below and answer the questions that follow:
Consumption expenditure
Item
Amount (000)
Consumption expenditure by households
150 000
Government expenditure
130 000
Gross capital formation
80 000
Gross domestic expenditure
360 000
Exports on goods and services
45 000
Imports on goods and services
65 000
GDP at market prices
(1)
(1)
(2)
(2)
(4)
A
4.2.1 What method of calculating the GDP is depicted by the table above?
(1)
4.2.2 Name any other method that can be used to calculate the GDP at market
prices.
(1)
4.2.3 Briefly describe the term Gross domestic expenditure.
(2)
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ECON GRD 11 L B
4.2.4 Explain the following components: GDE = C+ G+ I
4.2.5 Calculate the GDP at market prices (A). Show all calculations
4.3
(2)
(4)
Study the table below and answer the questions that follow
4.3.1 Identify ONE major participant in the circular flow.
(1)
4.3.2 Give ONE examples of non-durable goods.
(1)
4.3.3 Describe the term consumption expenditure by households.
(2)
4.3.4 What do you think determines the final consumption expenditure of
households?
(2)
4.3.5 With reference to the table above, analyse South African households spending
from 2014 to 2015?
(2 x 2) (4)
4.4
Study the table below and answer the questions that follow.
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Which publication would carry this information?
Complete the item represented by A in the table.
Describe the term Gross Domestic Product.
What is the purpose of the residual item?
Calculate expenditure on GDP at market prices (B).
37 | P a g e
(1)
(1)
(2)
(2)
(4)
ECON GRD 11 L B
4.5
Study the following cartoon and answer the questions that follow.
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
What economic message is conveyed in the above cartoon?
(1)
What would indicate that social services are not delivered efficiently?
(1)
Briefly describe the term national budget.
(2)
Explain how consumers spend their income in the national economy?
(2)
How can corruption be eliminated?
(2 x 2) (4)
4.6
Study the table below and answer the questions that follow.
4.6.1
4.6.2
4.6.3
4.6.4
4.6.5
Name the other classification of consumption expenditure by government. (1)
What does compensation of employees consist of?
(1)
Briefly describe the term final consumption expenditure by government. (2)
Explain the importance of final consumption expenditure by households. (2)
How can the South African government achieve the reductions estimated
in the table above?
(2 x 2) (4)
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4.7
Study the table below and answer the questions that follow.
NATIONAL PRODUCTION ACCOUNTS OF SOUTH AFRICA
GROSS VALUE ADDED BY KIND
OF ECONOMIC ACTIVITY
(GVA at current (GVA at constant
prices)
2015 prices)
2019 (Rm)
2019 (Rm)
Primary Sector
472 062
295 203
Secondary Sector
943 771
552 601
Tertiary Sector
3 107 747
2 017 745
Gross value added at basic prices
4 523 580
2 865 548
Source: SARB September 2020 Quarterly Bulletin
4.7.1 Identify the base year used by SARB above.
(1)
4.7.2 Which sector above contributed the most towards the GDP of South Africa?
(1)
4.7.3 Briefly explain the term gross value added at basic prices.
(2)
4.7.4 Why are GVA figures at constant prices lower than GVA figures at current
prices?
(2)
4.7.5 How will an increase in taxes on products affect the economy?
(2 x 2) (4)
4.8
Study the table and answer the questions that follow
4.8.1 Name the government expenditure classification used in the above table. (1)
4.8.2 Indicate the service in which the government allocates most of the resources.
(1)
4.8.3 Briefly describe the concept final consumption expenditure by the government.
(2)
4.8.4 Why does government spend more on education?
(2)
4.8.5 Calculate the total health expenditure in the above table. Show all
calculations.
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ECON GRD 11 L B
(4)
4.9
Study the table below and answer the questions that follow.
National income accounts of South Africa at current prices
2019
Compensation of employees
2 418 544
Net operating surplus
1 296 696
Consumption of fixed capital
713 078
A
4 428 317
Other taxes on production
105 061
Other subsidies on production
9 798
Gross value added at basic prices
4 523 580
Taxes on products
564 866
Subsidies on products
10 821
Gross domestic product at market prices
5 077 625
Source: SARB September 2020 Quarterly Bulletin
4.9.1 Provide the missing term for A.
(1)
4.9.2 Name ONE example of taxes on production.
(1)
4.9.3 What does the term gross domestic product entail?
(2)
4.9.4 What is the advantage of subsidies on production to the businesses?
(2)
4.9.5 Calculate net operating surplus as a percentage of GDP. Show ALL calculations.
(4)
QUESTION 5
Paragraph type questions – Middle Cognitive
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
5.1.
5.2
5.3
5.4
5.5
5.6
5.7
Briefly discuss classification of final consumption expenditure by households.
(8)
Differentiate between durable and non-durable goods.
(8)
Distinguish between taxes on products and taxes on production.
(8)
Differentiate between Gross Domestic Product (GDP) and Gross National
Product (GNP) as main aggregates in the economy.
(8)
Briefly explain final consumption expenditure by government.
(8)
Explain the difference between final goods and intermediate goods.
(8)
Tabulate the differences between capital (intermediate) and consumer goods.
(8)
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QUESTION 6
Paragraph type questions – Higher cognitive
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content (covered by dis-cuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as
higher-order questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
6.5
6.6
Why are capital goods and services important for producers of goods and
services?
(8)
How can the final consumption expenditure by government improve the standard
of living?
(8)
How will an increase in investment spending influence the economy?
(8)
Why does the government charge taxes?
(8)
How does the South African government use progressive taxes to address
economic equity through its national budget?
(8)
Analyse consumption expenditure by the South African households during the
2020 lockdown.
(8)
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MACROECONOMICS
TOPIC 3: ECONOMIC SYSTEMS
WEEK 6-7
ECONOMIC SYSTEMS
FREE MARKET ECONOMY
CENTRALLY PLANNED ECONOMY
MIXED ECONOMY
EFFICIENCY IN DELIVERING SOCIO-ECONOMIC SERVICES
INTRODUCTORY NOTES
Economics is the science of making choice under conditions of scarcity. What are the
basic issues about which choices are to be made? Any society must make choices about
three important problems. They are:
❖ What to produce and in what quantities? Food or weapons; if so, in what quantities? Is it more food and less weapons or vice versa?
❖ How shall goods be produced? Electricity from thermal power or from hydro
power?
❖ For whom shall the goods be produced? A few rich and many poor or most people
in modest comfort?
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Market, centrally planned and SA’s mixed economy
KEY CONCEPTS
Black market
Centrally planned
economy
Economic services
Economic systems
Exchange rate
Inflation
Market economy/capitalism
Market failure
Mixed economic
system
National budget
Nationalisation
Privatisation
Public order and
safety
Public sector
Social protection
Social services
Socio-economic
Subsidies
DESCRIPTIONS/DEFINITIONS
A market that develops for a good in short supply, at a higher than
normal price.
An economic system in which the factors of production are viewed
as communal property
An economic activity where an immaterial exchange of value occurs, e.g. when a service like labour is performed, the buyer does
not take exclusive ownership of that which is purchased, unless
agreed upon by buyer and seller.
The methods used by countries to allocate their resources.
The price of one currency, in terms of another currency.
A persistent increase in the general level of prices.
The economy that uses supply and demand to answer the questions of what, how and for whom to produce goods and services/It
is a market system whereby production factors are privately
owned.
When the output produced is not available in the required quantity
or quality to maximise the satisfaction of the people of the country.
An economic system that combines the advantages of both economic systems
The planned income and expenditure by the state for a given year.
The transfer of ownership of a business from the private sector to
the state.
The transfer of ownership of a business from the state to the private sector.
A department which has the primary goal of protecting the public
and keeping them safe.
Is made up of state – run activities or business.
Consists of policies and programs designed to reduce poverty and
vulnerability by promoting efficient labour markets, diminishing people’s exposure to risks, and enhancing their capacity to manage
economic and social risks, such as unemployment, exclusion, sickness, disability and old age.
Government services provide for the benefit of the community,
such as education, medical care, and housing.
Relating to society and the economy
Incomes given by the state to individuals or businesses for a specific purpose.
An economic system refers to how the different economic elements will solve the
central problems of an economy: what, how and for whom to produce.
It is important to remember that the Market Economy and Centrally planned economic
systems do not exist in the real life but only as a theoretical concept. All countries use a
mixture of the Market Economic system and Centrally Planned Economic system.
Definition: An economic system is the way that goods and services are produced and
resources distributed. In essences, it is the method that a country uses its resources to
satisfy the needs and wants of the population.
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The most general economic systems are:
• The market economy.
• Centrally planned economy
• Mixed economy
Market economy:
• An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning.
• The Market Economic system is also known as Market Capitalism or the Free Market
System.
Economic characteristics of a market economy:
• Individuals have the right to buy and own property.
• Profit is the only motive for the functioning of capitalism.
• Producers have the freedom to decide.
• Market forces like demand, supply and price are the signals to direct the system.
• As most of the basic economic problems are expected to be solved by market forces,
the government has minimal role in the economy.
Advantages of the market economy:
• Producers increases the productivity to meet his own self-interest.
• Welfare is maximised
• Operates automatically through the price mechanism.
• The State has a minimum role to play.
• Have full freedom and therefore it leads to production of quality products at low costs
and prices.
• Technological improvement
Disadvantages of the market economy:
• Capitalism creates extreme inequalities in income and wealth.
• Inequality leads to monopoly
• There is over-production of goods due to heavy competition.
• Capitalism encourages mechanisation and automation.
• Under capitalism, private enterprises produce luxury goods which give higher profits
and ignore the basic goods required which give less profit.
• Stringent labour laws are enacted for the exclusive profit-motive of capitalists.
• The economic questions of what should be produced, how it should be produced and
who it should be produced for are all answered through the market forces of demand
and supply.
Centrally planned economy:
• An economic system in which economic decisions are made by the state or government rather than by the interaction between consumers and businesses.
Economic characteristics of a centrally planned economy:
• Economies, social or collective welfare will be the prime motive.
• The right to private property is limited.
• Most of the economic policy decisions will be taken by a centralized planning authority.
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Advantages of the centrally planned economy:
• The resources are utilized efficiently to produce socially useful goods without taking
the profit margin into account.
• Economy is free from business fluctuations.
• All citizens work for the welfare of the State.
• The elements of corporation and monopoly are eliminated since there is absence of
private ownership.
• In socialist economies, basic human needs like water, education, health, social security, etc., are provided.
• As social welfare is the ultimate goal, there is no concentration of wealth.
• A socialist economy is operated under a centralized command and control system.
• There is no freedom of occupation.
• Work is monotonous and no freedom is given.
• Absence of competition makes the system inefficient.
Mixed Economic System
• The Mixed Economic system is a mixture of the Market Economic system and Centrally Planned Economic system. It aims to combine the advantages of each system
into one economic system: state intervention ensures equality while private business
allow for higher economic growth rates and economic efficiencies.
Economic characteristics of a mixed economy:
• In a mixed economy, both the public and the private sectors initiatives will be there
• As seen above, both capitalism and socialism have merits and demerits, mixed economy is expected to retain only the merits of the two systems.
• Planning will direct the relative roles of public and private sectors and their respective
jurisdictions.
Advantages of a mixed economy:
• The resources are utilized efficiently as good features of both capitalism and socialism
coexist.
• In the case of goods which are scarce, the prices are administered by the government
and such goods are also rationed.
• In a mixed economy, planning is centralized and there is overall welfare.
Disadvantages of a mixed economy:
• The coordination between the public and private sectors is poor in a mixed economy.
• There is too much of red-tape and corruption leading to delays in decision-making and
project implementation.
• The mixed economies experience economic fluctuations.
• All economies around the world use the Mixed Economic system. However, some
economies have stronger traits of the Market economic system (such as the USA and
South Africa) while other economies have stronger traits of a Centrally Planned Economy (such as North Korea and Cuba).
Efficiency in delivering socio-economic services
• In terms of its structure, South African local government is sub-divided into three basic
categories; metropolitan municipalities, district municipalities and local municipalities.
• The district municipalities are divided into a total of 234 local municipalities. In general,
a local municipality includes one or more towns and the surrounding villages and rural
areas.
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• A local municipality exercises all the municipal functions not carried out by the district
municipality within which it lies. Local municipalities' councils are elected in the same
way as those of metropolitan municipalities: half from wards and half by proportional
representation.
Social services
• One of the main duties of the state in a mixed economy is to provide social services to
improve welfare especially for the marginalised.
• Socio-economic services are mainly supplied by the government in an attempt to uplift
previously disadvantaged communities.
• The government also has to make sure that the economy can operate efficiently.
Some of the examples of social services are:
• Education and training
• Health care
• Housing and community amenities
• Social protection (welfare services & social grants)
• Public order and safety
Economic services
• Economic services are associated with regulating and operating the economy and the
business sector more efficiently.
• Some of the government functions are:
• Using monetary and fiscal policies to ensure economic stability.
Maintaining economic order by ensuring free competition, positive international trade
relations and properly regulated labour relations legislation.
Providing and maintaining infrastructure.
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QUESTIONS
SECTION A: TYPICAL EXAM QUESTIONS
ECONOMIC SYSTEMS
QUESTION 1:
Section A – Short Questions
: When answering Section A – short question, it is important not to rush but
to read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 An economic system is a way of answering the following basic economic
questions.
A
what, how and where?
B
what, how and for whom?
C
where, how and for whom?
D
where, what, and how?
1.1.2 The … is an economic system in which economic decisions are solely made by
market forces of demand and supply.
A
market economy
B
centrally planned economic system
C
mixed economy
D
capitalist economy
1.1.3
Decision-making within the market economy is…
A
concentrated.
B
decentralised.
C
autocratic.
D
centralised.
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1.1.4 South Africa's PAYE taxation system is …
A
proportional.
B
progressive.
C
regressive.
D
constant.
1.1.5 An advantage of the centrally controlled economy is …
A
choice.
B
innovation.
C
risk.
D
full employment.
1.1.6 In South Africa ,SABC, ESKOM and SAA are known as:
A
corporates
B
enterprises
C
parastatals
D
entities
1.1.7
There is less poverty among the people in communist countries because …
A
the profit motive leads to self-interest.
B
there is full employment.
C
the government plays a very small role in the economy.
D
there is a shortage of consumer goods.
1.1.8 A mixed economy is one that consists of …
A
large and small firms.
B
farms and factories.
C
goods and services.
D
public and a private sector.
1.1.9
An economic system where individuals are free to perform activities according to
their abilities is known as a …
A
mixed economic system.
B
market economy.
C
centrally planned system.
D
socialist system.
1.1.10 The economy failed in countries that applied central planning because …
A
B
C
D
there was a lack of incentive to work hard.
of a shortage of consumer goods.
there was full employment.
the state owned all the resources.
(10 x 2) (20)
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1.2.
Choose a description from COLUMN B that matches the item in COLUMN
A. Write only the letter (A-M) next to the question number (1.2.1 – 1.2.12)
in the ANSWER BOOK.
COLUMN A
1.2.1 Capitalism
COLUMN B
A.
The process of creating new technologies and
using them in the economy.
B.
Individuals are free to perform their
professions, trade without state intervention
C.
Excessive bureaucracy or adherence to
official rules and formalities
D.
The flagship of the South African government
to relief poverty
E.
Methods used by countries to allocate their
resources
F.
The government owns all the factors of
productions
G.
It includes education, health, social security
and welfare, housing and community services
include protection, sanitation and water
H.
Means of production are controlled by private
owners
1.2.2 Social services
1.2.3 Centrally planned
economy
1.2.4 Economic systems
1.2.5 Economic freedom
1.2.6 Mixed economy
1.2.7 Dual economy
1.2.8 Red tape
1.2.9 Innovation
1.2.10 Social grants
1.2.11 Economic freedom
1.2.12 Bureaucracy
I.
Resolves basic economic problems through market
forces
J The existence of two different economic sectors within
one country, divided by different levels of development,
technology and different patterns of demand
K
An economic system that features characteristics
of both market economy and centrally planned economy
L The government buying assets which are owned by the
private sector.
M Systems and procedures which are designed to maintain uniformity and control within an organization.
(12 x 1) (12)
1.3
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number.
No abbreviations, acronyms or examples will be accepted.
1.3.1 Excessive complicated administration procedures.
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1.3.2 They work on the assumption that market forces of supply and demand, are
the best determinants of what is right for a nation's well-being.
1.3.3 A business enterprise where the government or state has significant control
through full, majority, or significant minority ownership.
1.3.4 A way of determining how the different elements will solve the central
problems of an economy.
1.3.5 Consist of policies and programs designed to reduce poverty and
vulnerability by promoting efficient labour markets diminishing people’s
exposure to risk.
1.3.6 The government introduced this new macroeconomic strategy in 1996.
1.3.7 An economic system that combines the advantages of a centrally planned
and a free market economy.
1.3.8 Motivation or reward offered for increased productivity.
1.3.9 economic system where all economic decisions are made by the
government.
1.3.10 A focus on the needs or desires of one's self.
(10 x 1) (10)
SECTION B
QUESTION 2
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. These types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
Name any TWO characteristics of a command (centrally planned) economic
system.
(2 x 1) (2)
List any TWO state owned enterprises in South Africa.
(2 x 1) (2)
Mention any TWO levels of government.
(2 x 1) (2)
Name any TWO examples of social services which are provided by the South
African government.
(2 x 1) (2)
List any TWO disadvantages of market economy.
(2 x 1) (2)
List TWO types of economic systems.
(2 x 1) (2)
QUESTION 3
: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. Answers
must be provided in full sentences
3.1
3.2
3.3
3.4
3.5
3.6
3.7
Why is South Africa regarded as a mixed economy?
(1 x 2) (2)
How is the government funding its expenditure?
(1 x 2) (2)
Why do you think the RDP policy was not successful?
(1 x 2) (2)
Why might the businessman or woman be happier in a free market system?
(1 x 2) (2)
Why might the poor be happier in a command system?
(1 x 2) (2)
How does the market economy solve the central problem in an economy?
(1 x 2) (2)
What ensures flexibility in a market economy?
(1 x 2) (2)
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SECTION B
QUESTION 4
: All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document
DATA RESPONSE
4.1
Study the cartoon below and answer the questions that follow.
Which economic system is based on the principle of ‘invisible hand’?
(1)
Who allocates the resources in the system above?
(1)
Briefly describe the term economic system.
(2)
Explain ONE advantage of the economic system depicted in the data above.
(2)
4.1.5 How is self- interest beneficial for an economy?
(2 X 2) (4)
4.1.1
4.1.2
4.1.3
4.1.4
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4.2
Study the extract below and answer the questions that follow:
If there is no shop in a rural area, the state will tell one of the inhabitants to
start a spaza shop. By doing this, the state will decide what, how, and when
to produce in order to uplift the society.
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
What type of economic system is referred to in the above extract?
(1)
Who allocates the resources in the above extract?
(1)
Briefly describe the term economic system.
(2)
Explain how service delivery can be improved in South Africa.
(2)
Why is South Africa regarded as a mixed economy?
(2 x 2) (4)
4.3
Study the cartoon below and answer the questions that follow:
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Who is being burdened in the cartoon above?
(1)
What motivates consumers and producers in a pure market economy?
(1)
Briefly describe the term free market economy.
(2)
How does the market economy benefit the society?
(2)
Why would you not recommend capitalism as an economic system? (2 x 2) (4)
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4.4 Study the cartoon below and answer the questions that follow.
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Which type of economic system does South Africa use?
(1)
Who allocates the resources in the above economic system?
(1)
Briefly explain the term mixed economic system.
(2)
What role is played by the government in this mixed economic system?
(2)
How efficient is the South African government at delivering social services?
(2 x 2) (4)
4.5
Study the information and answer the questions that follow
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
Identify a country using the above-mentioned economic system.
List ONE advantage of a free market economy.
Briefly explain the term capitalism.
How is the market economy “self-regulating”? Motivate.
Why is capitalism not beneficial to all countries and consumers?
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(1)
(1)
(2)
(2)
(2 x 2) (4)
ECON GRD 11 L B
QUESTION 5
Paragraph type questions – Middle Cognitive
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Outline arguments for privatisation.
Discuss arguments for nationalisation.
Briefly explain the advantages of a market economy.
Discuss the disadvantages of a mixed economy.
Compare the ownership and motivation of centrally planned and mixed as
economic characteristic in a tabular form.
Tabulate the advantages of a market economy and a centrally planned
economy.
Discuss social welfare and resource utilisation as advantages of a mixed
economy.
Discuss the characteristics of a mixed economic system.
QUESTION 6
(8)
(8)
(8)
(8)
(8)
(8)
(8)
(8)
Paragraph type questions – Higher cognitive
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking,
where candidates should be able to apply their knowledge, through logical reasoning and also have
an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
6.5
Why is South Africa regarded as a mixed economy?
(8)
How can the South African economy benefit from a mixed economic system?
(8)
How effective is the delivery of social services in South Africa?
(8)
Evaluate South African government’s involvement in increasing access to
economic opportunities.
(8)
How efficient is the state in addressing the disadvantages of the market
system?
(8)
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SECTION C
TYPICAL EXAM QUESTIONS
ESSAY STRUCTURE
: All section C questions have TWO questions 5 & 6 NOT like in this document. In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION:
STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
• A good starting point would be to the main concept related to the
question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/
How/ Suggest/ Construct a graph
Max 2
Max 26
Max 10
Conclusion
Any Higher or conclusion include:
• A brief summary of what has been discussed without repeating
facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max 2
40
QUESTION 7
•
•
Discuss South Africa's mixed economic system in terms of:
- Characteristics
- advantages and
- disadvantages
(26 marks)
Evaluate the government's efficiency in delivery social services to local
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communities.
(10 marks)
[40]
QUESTION 8
•
Discuss a centrally planned economic system, with special reference to:
- economic characteristics,
- advantages and
- disadvantages
(26 marks)
 Analyse how South Africa’s dual economy and corruption are contributing factors
to the non-attainment of the state goals.
(10 marks)
[40]
QUESTION 9
•
•
Discuss the market economy with special reference to:
- Characteristics
- Advantages
- Disadvantages
(26)
Evaluate the efficiency of the state in addressing the disadvantages of the market
system.
(10)
[40]
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MACROECONOMICS
TOPIC 4: ECONOMIC STRUCTURES
WEEK 8-9
BASIC ECONOMIC PROBLEM, BUSINESS CYCLES
AND PUBLIC SECTOR; ECONOMIC STRUCTURE
THE PRIMARY SECTOR
THE SECONDARY SECTOR
THE TERTIARY SECTOR
SOUTH AFRICAS'S INFRASTRUCTURE
COMMUNICATION
TRANSPORT
ENERGY
EXCLUSION AND DISCRIMINATION IN SERVICE
PROVISION
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ECONOMIC STRUCTURES
• The modern economy can be divided into three sectors that reflect the economic development of that society.
• This lesson will discuss and explore the interaction between the primary, secondary
and tertiary sectors of the modern economy.
KEY CONCEPTS
KEY CONCEPTS
Affirmative action
DESCRIPTIONS/DEFINITIONS
All the measures taken by businesses to ensure that suitably
qualified employees from formerly disadvantaged groups have
equally employment opportunities at all levels of the work force.
Communication
The ways in which information is moved through the world.
Economic infrastruc- The internal facilities that make business activity possible such
ture
as communication, transportation and distribution networks, financial institutions and energy supply systems.
Exploitative operaCollection of raw materials that cannot be returned to nature
tions
what is taken from it such as mining and fishing.
Genetic operations
Collection of raw materials that can be returned to nature what is
taken from it such as farming and forestry.
Primary sector
All the activities based on raw materials that come from the
earth such as farming, mining, forestry and fishing.
Secondary sector
The manufacturing sector which includes manufacturing, electricity, gas and water production.
Structure of the
The way in which GDP is divided between the three economic
economy/ Economic sectors
structure
Tertiary sector
The sector that produces services such as transportation, accommodation, retailers etc.
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Definition
Composition
Primary sector:
• Refers to all the activities • Farming/
based on raw materials
Agriculture
that come from the earth • Fishing
• Forestry
• Mining
Secondary sector:
• Is concerned with the
• Manufacturing
middle stages in the pro- • Electricity, gas
duction of final goods. It
& water
is also referred to as the • Construction
processing sector
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Importance
Exclusion and discrimination
• Provides raw materials and fuels
• Creates employment & provides
training
• Contribute to economic
growth/GDP
• Earns foreign exchange.
• Provides food
• Provide revenue
to the state in the
form of taxes,
• The Land Act of
1913 forbid the sale
of land outside the
‘reserves’ or homelands to blacks.
• Black farmers in the
reserves/homelands
were excluded from
generous financial
support that white
farmers enjoyed
from government
• After 1948 blacks
were not allowed to
engage in mining as
owners.
• Contribution to
• Black people were
GDP
subjected to notorious Bantu educa• Produces contion, which rendered
sumer goods
even successful
• Creates employlearners vulnerable
ment & provides
to competition in the
skills and training
workplace.
• Earns foreign ex• Capital is required
change
to enter the second• Increases self-sufary sector successficiency
fully.
• The exclusion of
blacks from occupation that earns high
incomes left little
opportunities for
them that could produce wealth and
capital.
ECON GRD 11 L B
Definition
Tertiary sector
• The sector that produces
services.
Composition
Importance
Exclusion and discrimination
• Wholesale &
retail trade, catering & accommodation
• Transport,
storage & communication
• Financial intermediation, insurance, real
estate & business service
• Community,
social & personal services
• Contribution to
GDP/economic
growth
• Creates employment & provides
and training
• Creates markets
• Contribution to exports
• Backwards and
forward linkage
• The general rule
that blacks might
not own or occupy
property in any area
rather than specifically set aside for
the group rendered
businesses and professional opportunities out of their
reach.
• Even in the urban
townships, individuals & businesses
were limited.
QUESTIONS
SECTION A: TYPICAL EXAM QUESTIONS
ECONOMIC STRUCTURES
QUESTION 1
Section A – Short Questions
: When answering Section A – short question, it is important not to rush but
to read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions. Choose the answer and write only the letter (A–D) next to the
question number.
1.1.1 Food security renders … a vital industry.
A
agriculture
B
water
C
energy
D
retail
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1.1.2 … consist(s) mainly of private sector business enterprises e.g. cars, components,
machinery and tools.
A
B
C
D
Manufacturing
Construction
Agriculture
Wholesale and retail trade
1.1.3 In South Africa SABC, ESKOM and SAA are known as …
A
B
C
D
corporates.
enterprises.
parastatals.
private sector.
1.1.4 In the early 1900, the South African economy was dominated by the …
A
B
C
D
Primary sector
Secondary sector
Tertiary sector
Primary and tertiary sectors
1.1.5 Most of the electricity supply in South Africa is derived from …
A
nuclear energy.
B
hydroelectric power.
C
coal generated energy.
D
wind energy.
1.1.6 The secondary sector includes …
A
mining.
B
fisheries.
C
farming.
D
manufacturing.
1.1.7 Exploitative industries are part of the …
A
secondary sector.
B
primary sector.
C
services sector.
D
tertiary sector.
1.1.8 In South Africa, mining is the responsibility of the Department of …
A
Public Works.
B
Environmental Affairs.
C
Mineral Resources.
D
Energy.
1.1.9
Eskom generates electricity in South Africa by mainly using ...
A
water.
B
wind.
C
coal.
D
solar
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1.1.10 SANRAL is responsible for maintaining the ... in SA
A
B
C
D
1.2
harbours.
railway network.
airports.
national roads.
Choose a description from COLUMN B that matches the item in COLUMN
A. Write only the correct letter (A−I) next to the question number(1.2.1−1.2.8)
in the ANSWER BOOK.
COLUMN A
1.2.1 Primary sector
1.2.2 Social services
1.2.3 Tertiary sector
1.2.4 Eskom
COLUMN B
A provides services such as transport and communication
B involves the sale of goods or services directly to
the end-user.
C issues broadcasting licenses.
D regulate the energy industry in accordance with
government laws, policies, standards and international
best practices in support of sustainable development.
E aims to unify critical Infrastructure and key resource protection efforts across the country.
F South African electricity public utility
1.2.5 Wholesale
1.2.6 The Independent
Communications Authority
of South Africa
1.2.7 National infrastruc- G those who sell products to businesses or other outture protection plan
lets who are not the end-user.
1.2.8 NERSA
H are involved in the extraction of raw materials from
nature.
I are provided by the state e.g. education, health and
welfare.
1.3
(8 x 1) (8)
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The transmission of information by various types of technologies over wire, radio,
optical or other electromagnetic systems.
1.3.2 The long-distance transportation of a liquid or gas through a system of pipes.
1.3.3 The sector’ activities result in in wood being made into furniture, steel being made
into cars or textiles being made into clothes.
1.3.4 The internal facilities that make business activity possible e.g. communication,
transportation.
1.3.5 This policy aims to address the availability, accessibility and affordability of
broadband; the building of an information society; and promoting the uptake and
usage of broadband.
1.3.6 The sector that contributes the most to the GDP in South Africa and creates many
jobs.
(6 x 1) (6)
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SECTION B
SECTION B: TYPICAL EXAM QUESTIONS
QUESTION 2
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Name TWO kinds of primary sector activities.
Name any TWO component of communication infrastructure.
Name any TWO components of the secondary sector.
Name any TWO of South Africa’s four licensed mobile operators.
List TWO components of the secondary sector.
Name TWO types of workers found in the secondary sector.
Name any TWO commercial ports in South Africa.
List TWO types of transport modes found in South Africa.
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
(2 x 1) (2)
QUESTION 3
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure
that their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
3.6
Why is the primary sector important to the South African economy? (1 x 2) (2)
How important is an efficient infrastructure for the economy?
(1 x 2) (2)
Why is Eskom working on a renewable energy programme that involves
independent power producers?
(1 x 2) (2)
How can the primary sector contribute to the country’s economic growth?
(1 x 2) (2)
How does construction differ from manufacturing?
(1 x 2) (2)
How would poor infrastructure at sea ports affect the South African economy?
(1 x 2) (2)
QUESTION 4
: All section B questions have TWO data interpretation questions – each
total 10 marks. Section B consist of Questions 2-4 not as numbered in this
document
DATA RESPONSE
4.1
Study the picture below and answer the questions that follow.
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Transport infrastructure
South Africa’s air and rail networks are the largest on the continent.
The country has an extensive rail network – the 14th longest in the
world connecting with networks in the sub-Saharan region. The coun
try’s rail infrastructure, which connects the ports with the rest of South
Africa, represents about 80% of Africa’s total.
4.1.1
4.1.2
4.1.3
4.1.4
Name any transport system used in South Africa in the above diagram.
(1)
Which Agency maintains national and toll roads in South Africa?
(1)
Explain the reason for government investing money in public transport.
(2)
Why did the government introduce the Bus Rapid Transport (BRT) in South
Africa?
(2)
4.1.5 What is the positive impact of the Taxi Recapitalisation programme? (2 x 2) (4)
4.2
Study the extract below and answer the questions that follow
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4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
Name any ONE component of communication infrastructure.
(1)
When does the South African fiscal year start?
(1)
Briefly describe the term infrastructure.
(2)
Explain the importance of communication infrastructure to businesses.
(2)
How will the R100 billion long term investment affect the economy? (2 x 2) (4)
4.3
Study the information below and answer the questions that follow.
SOUTH AFRICA HAS A HIGHLY DEVELOPED INFRASTRUCTURE
Eskom, one of the world’s top energy providers in terms of output, exports power to
other African countries. Electricity in South Africa comes from coal, water and nuclear
power. In 2008, Eskom implemented a mass electrification programme to upgrade and
expand the county’s electricity infrastructure.
[Source: www.eskom.co.za]
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4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Name the national provider of electricity in South Africa.
Mention ONE source of energy in South Africa.
What is the role of NERSA?
Why is Eskom the only supplier of electricity in South Africa?
How does load-shedding negatively affect the economy?
4.4
Study the picture below and answer the questions that follow.
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Name the primary sector presented in the above picture.
Mention ONE other type of primary sector.
Briefly describe the term primary sector.
How is the primary sector linked with the secondary sector?
Why is the contribution to GDP important in the primary sector?
4.5
Study the information below and answer the questions that follow
66 | P a g e
(1)
(1)
(2)
(2)
(2 x 2) (4)
(1)
(1)
(2)
(2)
(2 x 2) (4)
ECON GRD 11 L B
4.5.1 Identify the tertiary activity in Gauteng which contributes the most to
South Africa’s economy?
(1)
4.5.2 Give an example of personal service.
(1)
4.5.3 Briefly explain the term tertiary economic activities.
(2)
4.5.4 Why is tertiary sector becoming more important than primary and secondary
sector?
(2)
4.5.5 How will a better infrastructure benefit the community of South Africa?
(2x2) (4)
QUESTION 5
Paragraph type questions – Middle Cognitive
TYPICAL EXAM QUESTIONS
: All section B questions have TWO 8 marks questions, numbered according
to questions not like in this document.
5.1
5.2
5.3
5.4
5.5
Discuss the tertiary sector as a component of GVA.
(8)
Briefly explain the economic importance of ‘energy’ as part of South Africa’s
infrastructure.
(8)
Discuss the economic importance of the secondary sector in the economy (8)
Briefly discuss the economic importance of the primary sector.
(8)
Briefly explain exclusions in South Africa’s infrastructure.
(8)
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Paragraph type questions – Higher cognitive
QUESTION 6
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking,
where candidates should be able to apply their knowledge, through logical reasoning and also have
an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
6.5
6.6
How does the cell phone industry help the poor to gain access to communication?
(8)
What has caused the ongoing energy crisis in South Africa since 2008? (8)
How important is transport infrastructure in the economy?
(8)
What is the link (interaction) between the Primary and Tertiary sector?
(8)
Analyse the economic importance of energy as part of South Africa’s
infrastructure.
(8)
Analyse the importance of communication in the economy.
(8)
SECTION C
ESSAY STRUCTURE
: All section C questions have TWO questions 5 & 6 NOT like in this document. In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK
ALLOCATION:
STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
• A good starting point would be to the main concept related to
the question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss
in the body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/
Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/
Briefly debate/ How/ Suggest/ Construct a graph
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Max 2
Max 26
Max 10
ECON GRD 11 L B
Conclusion
Any Higher or conclusion include:
• A brief summary of what has been discussed without repeating facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max 2
40
QUESTION 7
•
•
Discuss the economic importance of the tertiary sector.
How do the economic sectors link with one another?
(26 marks)
(10 marks)
[40]
QUESTION 8
•
Discuss transport as one type of infrastructure in South Africa.
(26 marks)
•
How did discrimination and exclusion affected the provision of
infrastructure before democratisation of the South African economy.
(10 marks)
[40]
QUESTION 9
•
•
Discuss the importance of the secondary sector in an economy.
(26 marks)
How can the establishment of more labour-intensive industries benefit South
Africa?
(10 marks)
[40]
QUESTION 10
•
•
Discuss the economic importance of the primary sector in the economy.
(26 marks)
Critically evaluate the programmes that try to redress the issue of land in South
Africa.
(10 marks)
[40]
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TOPIC 2 – MICROECONOMICS:
CONTENT PROGRESSION – MICRO ECONOMICS
Grade 10
Grade 11
Grade 12
DYNAMICS OF MARKETS
RELATIONSHIP BETWEEN MARKETS
PERFECT MARKETS
The market as a phenomenon (demand and
supply). Use graphs to illustrate the establishment of prices and quantities.
Analysis of the relationships between markets
- illuminate them with the aid of graphs.
Examine the dynamics of perfect markets with
the aid of cost and revenue curves.
PRODUCTION POSSIBILITY CURVE
EFFECTS OF COST AND REVENUE
IMPERFECT MARKETS
Description of the production possibility curves
(reflecting on efficiencies) and explain how they
reconcile choice and scarcity.
Explain and illustrate by means of graphs the
effects of cost and revenue on prices and the
levels of production.
Examine the dynamics of imperfect markets with
the aid of cost and revenue curves.
PRICE ELASTICITY
Explanation of price elasticity’s and calculating
their values. Use graphs in presentation for illustrations.
PUBLIC SECTOR INTERVENTION
MARKET FAILURE
The effects (in terms of prices and quantities) of
the public sector’s involvement and intervention
in the market, with the aid of graphs.
Explain the reasons for and consequences of
market failures, reflecting on the cost-benefit
analysis.
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MICROECONOMICS
MICROECONOMICS
TOPIC 1 : RELATIONSHIP BETWEEN MARKETS
(WEEK 1-2)
RELATIONSHIP
BETWEEN MARKETS
EFFECTS OF COSTS &
REVENUES
PRICE ELASTICITIES
: When answering Section A – short question, it is important not to rush but
to read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
71 | P a g e
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TOPIC 1:
MICROECONOMICS: RELATIOSHIP BEWTEEN MARKETS
QUESTION 1 MULTIPLE CHOICE
1.1.1 One of the following phrases depicts demand relationships between substitutes
(ceteris paribus)
A. Decrease in prices of a product and an increase in demand of the substitute
product
B. Increase in the price of a product and an increase in demand of the substitute
product
C. Decrease in the price of a product and a decrease in the demand of the product
D. Increase in price of a product and no increase in demand of the substitute
product
1.1.2 A market that exists when buyers and sellers meet to negotiate the exchange of
prohibited goods, is referred to as a/the … market.
A. Goods
B. Factor
C. Black
D. Capital
1.1.3
The … price is the price of one good expressed in terms of another.
A. nominal
B. index
C. percentage
D. relative
1.1.4 If the bank charges of FNB decreases, the demand for ABSA products will …
A.
B.
C.
D.
increase.
decrease.
stay the same.
stop.
1.1.5 The sacrifice that must be made of one item in favour of another, because of
scarcity, is known as …
A.
B.
C.
D.
opportunity costs.
scarcity costs.
cost of living.
standard costs.
1.1.6 Satisfaction derived from consuming a product is known as … utility.
A.
B.
C.
D.
Average
Marginal
Total
Average variable
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1.1.7 An ice cream cost R10 and a cold drink costs R30. If a consumer chooses to buy
the cold drink, what will his/her opportunity cost be?
A.
B.
C.
D.
2 ice creams
1 ice cream
2 cold – drinks
1 cold drink and 1 ice cream
1.1.8 Tennis balls and tennis racquets are ... products
A
substitute
B
heterogeneous
C
homogeneous
D
complementary
1.1.9 The price that is quoted for a good on the market and give signals to the
buyers is called … price.
A
absolute
B
relative
C
real
D
constant
1.1.10 If ‘A’ and ‘B’ are substitute goods, and the price of ‘B’ rises, demand for ‘A.’
A
decrease
B
remains the same
C
remains unstable
D
increases
1.1.11 Ice cream and ice cream cones are … products.
A
substitute
B
complementary
C
homogeneous
D
heterogeneous
1.1.12 An increase in the price of one product leads to an increase in the demand for another product, means that these two are ... goods.
A
complementary
B
essential
C
substitute
D
same
1.1.13 ... price is the ratio between the price of a product and the prices of other
products.
A
Market
B
Absolute
C
Basic
D
Relative
1.1.14 When one decision is made, the next best alternative not selected is called …
A
economic resources.
B
opportunity cost.
C
scarcity.
D.
need.
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1.2 MATCHING COLUMNS
COLUMN A
1.2.1 Base year
COLUMN B
A. The market price is determined by the market
forces.
1.2.2 Markets
1.2.3 Complementary goods
B. Legal rights which protect the inventor from
competition.
1.2.4 Price taker
C. Ensure optimal allocation of scarce resources
1.2 5 Economies of scale
D. The cross-price elasticity of demand is positive.
1.2.6 Duopoly
1.2.7 Total costs
E. Price of one good compared to another good
that indicates opportunity cost.
1.2.8 Patents
F. Change in price has no effect on supply
1.2.9 Monopolistic competition
G. Production costs decrease as outputs increase
H. The point where the firm breaks even.
1.2.10 Deadweight loss
1.2.11 Perfectly inelastic
supply
1.2.12 Cartel
1.2.13 Oligopoly
I. Controls the price of the product and tends to
set the price for its own benefit.
J. A combination of perfect and imperfect competition.
K. The market makes economic loss in the short
run.
1.2.14 Marginal revenue
L. Natural resources are not evenly distributed
1.2.15 Substitutes
M. TFC + TVC
1.2.16 Normal profit
1.2.17 Disutility
N. Legal rights which protect the inventor from
competition.
1.2.18 Ped is greater than 1
O. The year in which an index starts.
1.2.19 Inferior goods
P. The demand curve is kinked.
1.2.20 Relative price
Q. Quantity produced is below socially efficient
level
R. They are jointly demanded.
S. Price elastic demand
T. A feeling of uselessness, a lack of utility.
U. Market structure dominated by two firms.
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COLUMN A
COLUMN B
V. The change in the firm’s total revenue as a result of selling an extra unit of the output.
W. A good that has a negative income elasticity of
demand
X. An association of manufacturers or suppliers
formed to maintain high prices and restrict
competition.
( 20 x 1 ) (20)
HINT: Learners must know their concepts well, as this will assist in a better understanding of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
1.1
1.3.1
1.3.2
1.3.3
1.3.4.
1.3.5
CONCEPTS
The demand relationship between goods that are used in conjunction with each
other.
The price of a good or service, in terms of another good or service
The responsiveness of the quantity supplied of a product to a change in its price.
This good can be used in place of another good.
The opportunity cost of the use of all self-owned resources in the production of
goods and services.
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
QUESTION 2
2.1
Give TWO examples of normal goods.
2.2
List any TWO examples of complementary goods.
2.3
Give TWO examples of substitute goods
(2)
(2)
(2)
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
QUESTION 3
3.1 Why would a change in the price of a good influence consumers’ demand for that
specific good?
(1x2) (2)
3.2 What effect will the increase of absolute prices have on the consumers’ spending
power?
(1x2) (2)
3.3 How would decreasing relative prices influence people’s standard of living?
(2)
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All section B questions have TWO data interpretation questions –
each total 10 marks. Section B consist of Questions 2-4 not as
numbered in this document.
QUESTION 4
4.1
Study the graph below and answer the questions that follow.
MARKET FOR PETROL
PRICE
EE
S1
D
S
E2
P1
E
P
S1
D
S
Q
4.1.1
What is depicted by the diagram above?
4.1.2
What is the impact on the price and quantity of the shift in supply from
SS to S1S1?
(1)
Explain the phrase inverse relationship.
(2)
What may be the cause of a shift in supply from SS to S1S1?
(2)
Draw the graph of the complement product (petrol) and indicate what
the reaction would be.
(4)
4.1.3
4.1.4
4.1.5
4.2
QUANTITY
(1)
Study the graph and answer the questions that follow
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4.2.1
4.2.2
4.2.3
4.2.4
Give an example of a substitute for milk?
(1)
What happened to the price of milk?
(1)
Why did the demand for milk shift from D1 to D2?
(4)
Explain how the demand for a good is affected by the prices of its related goods.
Give examples.
(4)
4.3
Study the graphs and answer the questions that follow
4.3.1 Describe complementary products.
(2)
4.3.2 In your answer book, copy the graph for Good Y and illustrate graphically
the impact of an increase in price (from P0 to P1) of Good X on the complementary Good Y.
(6)
4.3.3 Why is it important to the producer to understand the relationship between
complements?
(2)
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4.4
Study the graph and answer the questions that follow
4.4.1
4.4.2
4.4.3
4.4.4
Name the price shift that takes place in the graph above.
(1)
Give ONE reason for the shift in supply from SS to S1S1.
(1)
Briefly describe the term complementary goods.
(2)
Why would the increase in the price of substitute goods like I-Phone devices
cause an increase in the demand of Samsung devices?
(2)
4.4.5 Illustrate the impact of an increase in the petrol price on a complementary
good, using a neatly labelled diagram.
(4)
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4.5
Study the graphs and answer the questions that follow
4.5.1 Describe complementary products.
(2)
4.5.2 Why is it important for the producer to understand the relationship between
complementary products?
(2)
4.5.3 In your answer book, copy the graph for Good Y and illustrate graphically the
impact of an increase in price (from P0 to P1) of Good X on the complementary
Good Y.
(6)
QUESTION 5
MIDDLE ORDER PARAGRAPH
5.1 Explain the relationship between product market and the factor market.
(8)
5.2 With the aid of graphs, explain how an increase in demand of a product affects the
factor market.
(8)
5.3 Use a well-labelled graph to explain how the demand curve of milk would respond
when the price of coffee decreases.
(8)
5.4 With the aid of graphs show the effect on the price of cars if there is a
decrease in the supply of machinery and equipment to produce them. (8)
5.5 Explain how the demand for a good is affected by the prices of its related goods.
(8)
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QUESTION 6
HIGHER ORDER PARAGRAPHS
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking, where candidates should be able to apply their knowledge, through
logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
With the aid of a graph, illustrate the effect of an increase in the price of beef when
consumers can substitute beef with chicken.
(8)
Why would consumers react to price changes?
(8)
Why are relative prices important for the Economy?
Evaluate the impact of the law of diminishing returns on the producer.
(8)
SECTION C
TYPICAL EXAM QUESTIONS
ESSAY STRUCTURE
: All section C questions have TWO questions 5 & 6 NOT like in this document. In the examination you will need to answer only one.
80 | P a g e
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HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK ALLOSTRUCTURE OF ESSAY:
CATION:
Introduction
Max 2
The introduction is a lower-order response.
• A good starting point would be to the main concept related to
the question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss
in the body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ CritiMax 26
cally discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/
Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly
Max 10
debate/ How/ Suggest/ Construct a graph
Conclusion
Any Higher or conclusion include:
Max 2
• A brief summary of what has been discussed without repeating facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
40
RELATIONSHIP BETWEEN MARKETS
QUESTION 7
•
•
Explain the demand side relationships with the aid of graphs and examples.
(26)
Why is it important for the product market to consider what is happening in
the factor market?
(10)
QUESTION E.G
With the aid of clearly labelled graphs and using typical examples of substitute
goods in both production and consumption, discuss demand and supply relationships.
(26)
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ECON GRD 11 L B
MICROECONOMICS
TOPIC 2: DYNAMICS OF MARKETS
EFFECTS OF COSTS & REVENUES (WEEK 3 – 4)
Concept / Term
Absolute price
Complement
Complementary
goods
Demand
Economic profit
Factor market
Goods market
Heterogenous
products
Homogenous
products
Imperfect markets
Law of demand
Law of supply
Market structures
Monopolies
Monopolistic
competition
Nominal prices
Oligopolies
Perfect market
Price takers
Relative price
Substitute goods
Substitutes
Supply
82 | P a g e
Definition / Description
The price the consumer pays for goods and services in rand and
cents
Two or more goods that are connected in some manner to each other
and can be used together
Goods that are used with another good; an increase in the price of the
one will result in a decrease in the demand for the complementary
product
The quantity bought by customers at different prices
The enterprise earns more profit than it could earn elsewhere employing the same factors of production
Markets where factors of production are sold to the producers in the
enterprises
Markets where the final goods are exchanged between producers and
consumers
Products differ
The product of one producers is indistinguishable from that of another
(products are the same)
These are the monopolistic competitors, oligopoly and monopoly, that
are not part of the perfect markets
When prices increase the quantity demanded dropped, when prices
drops the demand increases
When prices increase, the quantity supplied rises: when prices drop,
the supply drops
Describe the different levels and forms of competition
A monopoly exists if there is only a single seller of a product of which
there are no close substitutes
Is a market composed of a number of producers whose
The price you see on goods and those that are quoted for services
An oligopoly is a market composed of only a small number of
dominant producers, whose pricing decisions are interdependent
Represents the ideal level of competition
It is sellers who do not believe they can control the markets price by
varying its own production levels
The price of one good or services in terms of another, expressed as a
ratio of two prices, the price of goods compared to other goods
Goods that can be used instead of another product, a change in the
price of the one will result in an increase/decrease of the other
Products that are so similar that they can be bought instead of the
original good
The quantity that producers are willing and able to sell at a certain
price and time
ECON GRD 11 L B
SECTION A: TYPICAL EXAM QUESTIONS
DYNAMICS OF MARKETS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 All other things being equal, supply curves slope upwards from left to right
because …
A.
higher prices lead to higher profits.
B
lower prices lead to higher output.
C
lower prices lead to higher demand.
D
middle prices lead to lower output.
1.1.2 In imperfect markets, fewer goods are produced at higher prices because
A
there is constant allocation of resources.
B
there is effective resource allocation
C
there is ineffective resource allocation.
D
there are no legal restrictions
1.1.3 What would be the economic profit if you had revenue of R10 000, explicit costs of
R6 000 and implicit costs of R2 500?
A
10 000
B
1 500
C
500
D
15 000
1.1.4 The following are examples of firms in oligopoly:
A
MTN, Absa, Engen
B
NIKE, McDonald’s, BMW
C
KFC, Samsung, Romans Pizza
D
Shoprite, Checkers, Pick n Pay
1.1.5 Many firms selling heterogeneous products are referred to as …
A
monopolies.
B
oligopolies.
C
monopolistic competition.
D
perfect competition.
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1.1.6 The demand curve for a monopolistic competition is ...
A
horizontal.
B
vertical.
C
downward-sloping.
D
upward-sloping.
1.1.7 The market where final goods and services that are locally produced are sold to
consumers is the ...
A
money markets.
B
goods market.
C
international market.
D
financial market.
1.1.8 Firms that determine their own prices are called price …
A
takers.
B
makers.
C
negotiators.
D
searchers.
1.1.9 Resources that may become exhausted if they are not managed in a sustainable
manner are known as … resources.
A
natural
B
non-renewable
C
man-made
D
renewable
1.1.10 Profit maximisation point is where ...
A.
B.
C.
D.
MC = AR
MC = MR
AC = MR
AC = AR
1.1.11 Monopolies produce goods that are … in nature.
A.
B.
C.
D.
homogenous
differentiated
good
unique
1.1.12 The oligopolist is a …
A.
B.
C.
D.
Price-searcher
Price-taker
Price –leader
Price giver
1.1.13 As a rule, the firm should shut down when …
A.
B.
C.
D.
MC = AVC
MC = ATC
MR = MC
AR = AC
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1.1.14 The AR curve is always above the MR curve because …
A.
B.
C.
D.
AR is more inelastic than MR
MR is more elastic than AR
AR is more elastic than MR
MR is more inelastic than AR
1.1.15 The … curves resemble the demand curve.
A.
B.
C.
D.
MC and AC
AR and AC
MC and MR
MR and AR
1.1.16 Which of the following is not a characteristic of a perfect market?
A.
B.
C.
D.
Few participants
Participants fully knowledgeable about prices
No barriers to entry and exit
Participants are price takers
1.1.17 Collusion is a common practice in …
A.
B.
C.
D.
Perfect markets
Monopolistic markets
Monopoly
Oligopoly
1.1.18 The graph below indicates…
A.
B.
C.
D.
profit of a perfect market.
loss of a perfect market.
profit of a monopoly.
loss of a monopoly.
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1.1.19 The minimum earnings that will prevent the entrepreneur from leaving
the business.
A. Economic profit
B. Economic loss
C. Normal profit
D. Normal loss
1.1.20 Price wars are characteristics of this type of market.
A.
B.
C.
D.
Monopolistic competition
Monopoly
Perfect
Oligopoly
1.1.21 Costs that change as production changes are called …
A.
B.
C.
D.
Fixed costs.
Variable costs.
Average costs.
Total costs.
1.1.22 A stage in which the long-run average cost curve (LRAC), where
production neither increase or decreases is known as …
A.
B.
C.
D.
economies of scale.
diseconomies of scale.
no returns to scale.
constant returns to scale.
1.1.23 The total cost curves always starts at …
A.
B.
C.
D.
0
The same place total fixed cost starts
The same place total variable cost starts
The same place total revenue starts
1.1.24 Profit maximisation is where the vertical distance between … and TC
is the biggest.
A.
B.
C.
D.
TFC
TVC
MC
TR
1.1.25 Additional cost paid by the firm for every additional unit produced.
A.
B.
C.
D.
Marginal profit
Marginal revenue
Average cost
Marginal cost
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1.1.26 When one country can produce a good using fewer resources than another country, it has … advantage in the production of that good.
A
absolute
B
dual
C
relative
D
comparative cost
1.1.27 The dynamics of economies starts with …
A
production.
B
prices.
C
markets.
D
consumption.
1.1.28 Freedom of entry is a characteristic of … markets.
A
perfect
B
perfect and monopolistic
C
monopolistic
D
imperfect market
1.1.29 Selling differentiated products is a characteristic of a/an … market.
A
monopoly
B
perfect
C
oligopolistic
D
monopolistic
1.2
Choose a description from COLUMN B that matches the item in COLUMN
A. Write only the letter (A-Q) next to the question number (1.2.1 –1.2.17) in
the ANSWER BOOK.
COLUMN A
COLUMN B
1.2.1
Relative prices
A
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
Inferior goods
Product market
Price maker
Patent
Business objective
B
C
D
E
F
1.2.7
1.2.8
1.2.9
Long term
Supply
Monopolies
G
H
I
1.2.10 Oligopoly
J
1.2.11 License
1.2.12 Factor market
1.2.13 Absolute benefit
K
L
M
1.2.14 Collusion
1.2.15 Duopoly
N
O
87 | P a g e
Able to influence the market price through
changing the quantity it supplies to the market.
Barriers to enter the market.
Goods and services are traded.
Period long enough to change the inputs.
Few large sellers dominating the market.
barriers protect them from competition by
other businesses.
goods offered for sale at a given price.
Legal barrier to entry.
Increase in income leads to smaller quantities
demanded of these goods.
Facilitates the purchase and sale of services of
factors of production, which are inputs like labour,
capital, land and entrepreneurship that are used by
a firm to make a finished product.
Comparison between prices of goods.
Making as much profit as possible.
Any market that does not have all the
characteristics of a perfect market
Businesses set and agree on prices
Powerful competitors try to take over each other’s
market share by progressively reducing prices
ECON GRD 11 L B
COLUMN A
COLUMN B
1.2.16 Imperfect market
P
1.2.17 Price war
Q
Appear when a country can produce more of a
product than another country using the same
amount of resources
Market structure dominated by two firms
HINT: Learners must know their concepts well, as this will assist in a better understanding of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations
will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
The price of a good or service, in terms of another good or service
Many buyers and sellers selling differentiated products.
A period whereby only one factor of production can be varied.
Minimum earnings that will prevent an entrepreneur from employing its factors of production elsewhere.
1.3.5 The marketplace in which final goods or services are offered for purchase by
consumers, businesses, and the public sector
1.3.6 An increase in income causes a decrease in demand for this good.
1.3.7 Demand curve for an oligopoly.
1.3.8 When firms do branding, advertising, product differentiation, extend shopping
hours.
1.3.9 The rivalry among sellers trying to achieve such goals as increasing profits,
market share, and sales volume by varying the elements of the marketing
mix: price, product, distribution, and promotion
1.3.10 When consumers compare the cost of products with each other to ensure
value for money.
1.3.11 A platform where the quantities and prices of production inputs are negotiated.
1.3.12 The number of customers that one firm has access to in relation to the other
firms in the market
1.3.13 Products that are not identical to other similar ones and have slight differences
1.3.14 A combination of perfect competition and imperfect competition
1.3.15 It states the inverse relationship between quantity demanded and prices
1.3.16 A situation where sellers enter into an agreement to limit competition and
increase financial gain.
1.3.17 The satisfaction gained from the consumption of a given quantity of goods.
1.3.18 A market structure in which one business has market power.
1.3.19 Burger King is an example of this market structure.
1.3.20 A market structure is very easy to enter and the products are homogenous.
1.3.21 The quantity where MR is equal to MC.
1.3.22 Cement is an example of a product sold in the market structure
1.3.23 The cost that changes according to the level of production
1.3.24 The sum of fixed costs and variable costs.
1.3.25 A market dominated by two firms
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1.3.26 A market structure in which all production of a good or service is done
by a single firm
1.3.27 Entry of new firms into the market is completely blocked
1.3.28 A period during which all factors of production are variable.
1.3.29 Satisfaction derived from consuming an additional unit of a good or service.
1.3.30 A period during which at least one factor of production is fixed.
1.3.31 Profit in excess of normal profit.
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but
merely one or two words. This MUST be done in bullet form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
Name any TWO monopoly industries in South Africa
(2)
Give any TWO examples of monopolistic markets.
(2)
List any TWO kinds of profit.
(2)
Name any TWO factors that can cause a shift of the demand curve.
(2)
Name (Give/List) TWO characteristics of perfect markets.
(2)
List TWO objectives of business.
(2)
Name any TWO monopoly industries in South Africa.
(2)
List any TWO characteristics of perfect markets.
(2)
Give any TWO examples of monopolistic markets.
(2)
Give TWO derivatives calculated from Total Revenue.
(2)
Name any TWO averages used to determine economic profit
(2)
Name TWO barriers that prevent new businesses from entering a monopoly
market.
(2)
Give TWO examples of fixed costs in the short run.
(2)
Name any TWO Oligopoly industries in South Africa.
(2)
List any TWO methods of non-price competition.
(2)
Give any TWO examples of fixed costs in the short-run.
(2)
QUESTION 3:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
What would encourage a producer to continue increasing its production? (2)
How does an increase in demand affect the price of a good/service?
(2)
Why is it important for businesses to set goals?
(2)
What makes it impossible for an individual producer in perfect competition to
make an economic profit in the long run?
(2)
How is non-price competition an advantage for a perfect competitor?
(2)
Why is the demand curve for a perfect competitor horizontal?
(2)
Why is it impossible for a monopoly to collude?
(2)
Why is the demand curve of a monopolist sloping downwards?
(2)
What is the implication of the Law of supply?
(2)
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3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
How do product and factor markets relate to one another?
(2)
Explain what is meant by excess demand.
(2)
Explain the role of the monopoly as a price maker
(2)
Why does the average fixed-cost curve slope downwards from left to right?
(2)
How do imperfect market structures occur?
(2)
Why will consumers benefit more under perfect competition than under a
monopoly?
(2)
Why does the AR curve always lie above the MR curve?
(2)
How do imperfect market structures occur?
(2)
DATA RESPONSE
HINT: All section B questions have TWO data interpretation questions – each total 10
marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4:
4.1.
Study the extract below and answer the following questions:
THREE MONOPOLIES THAT SOUTH AFRICA SHOULD END
Entities that are protected by legislation morph into monopolies, resulting in limited competition. Time and time again, these legislated monopolies bank on the
taxpayer’s rands to bail them out of the repercussions of what seems to be
chronic underperformance. Below is a list of industries that are overshadowed
by state-run monopolies that, if deregulated and privatised, will yield far greater
returns to the citizens of South Africa.
➢ Aviation
➢ Energy Supply
➢ Railways
4.1.1 Identify ONE of the three state monopolies implied in the extract
(1)
4.1.2 How are monopolies protected?
(1)
4.1.3 Describe the term monopoly.
(2)
4.1.4 Why do you think South Africa should end the monopolies mentioned
above in the above extract?
(2)
4.1.5 Explain the disadvantages of the monopolies
(4)
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4.2
Study the extract below and answer the questions that follow:
OLIGOPOLIES
A few large oligopolies dominate an oligopoly market, i.e. just a few handset
manufacturing companies dominate the cell network of South Africa. The
products are similar, and sold by a few companies. Moreover, the products
are branded due to extreme competition, and because there are huge longterm entry barriers, the companies make exorbitant profits. The competing
companies have an unusual interdependence, to the point that they almost
operate in unison.
[Adapted from Markitects./co.za]
4.2.1 From the extract, list any ONE feature of an oligopoly
(1)
4.2.2 What other economic term describes the nature of the product sold by
oligopolies?
(1)
4.2.3 Explain the term entry barrier
(2)
4.2.4 Why do firms collude with one another?
(2)
4.2.5 How does branding assist a company operating in an oligopoly market
structure?
(4)
4.3
Study the graph and answer the questions that follow
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
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Which market structure is depicted above?
What type of profit is indicated in the above graph?
Briefly explain point ‘e’ on the graph.
Explain the slope of the marginal cost curve.
Why are MR and AR equal in the graph?
ECON GRD 11 L B
(1)
(1)
(2)
(2)
(4)
4.4
Study the graph and answer the questions that follow
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
4.5
What does the shaded area in the graph represent?
Which point on the graph illustrates profit maximisation?
Briefly describe the term monopoly.
Explain entry as a feature of a monopoly.
Use the information from the graph, calculate the profit or loss.
Show ALL calculations.
(1)
(1)
(2)
(2)
(4)
Study the scenario below and answer the questions that follow
4.5.1 What should be the main focus of ACSA?
4.5.2 Identify ONE of the South African Airways competitors.
4.5.3 Briefly explain the term competition
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(1)
(1)
(2)
4.5.4 How did the introduction of competition benefit the airline?
(2)
4.5.5 Would you describe the taxi industry in South Africa as a monopoly?
Explain.
(4)
4.6
Read the extract below and answer the questions that follow
4.6.1 Which market structure is represented by the extract above?
(1)
4.6.2 Name any ONE method of non-price competition.
(1)
4.6.3 Briefly describe the term differentiated products.
(2)
4.6.4 Why do firms benefit from collusion?
(2)
4.6.5 How does branding and brand loyalty impact new entrants such as T-Touch
mobile to the market?
(4)
4.7
Study the graphs and answer the questions that follow
4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
Describe the shape of the individual firm's demand curve.
Name the market price in the graphs above.
Briefly explain what long-run cost of a business is.
Why is a firm in the perfect market a price taker?
How is the price of a perfect market influenced in the long run?
93 | P a g e
(1)
(1)
(2)
(2)
(2 x 2) (4)
ECON GRD 11 L B
4.8
Study the graph below and answer the questions that follow:
4.8.1 Which market structure is depicted by the graph above?
4.8.2 What type of profit is being made by this firm?
4.8.3 Briefly describe the term profit maximization.
4.8.4 Why should Eskom always make an economic profit?
4.8.5 Determine this firm’s economic loss/profit. SHOW ALL CALCULATIONS.
4.9
(1)
(1)
(2)
(2)
(4)
Study the picture and answer the questions that follow
4.9.1 Why would an entrepreneur choose to operate in a monopolistically competitive
market?
(1)
4.9.2 What kind of profit can these competitors make in the short run?
(1)
4.9.3 Based on the cartoon, give TWO characteristics of monopolistic competition.
(2)
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4.9.4 Name TWO similarities between a perfect competitor and a monopolistic competitor in the long run.
(2x1) (2)
4.9.5 How can the two competitors depicted in the cartoon compete? Give examples.
(2x2) (4)
4.10
Read the extract and answer the questions that follow
4.10.1 Which company involved in a takeover mentioned above is a South African company?
(1)
4.10.2 In which industry is the above-mentioned company they involved in?
(1)
4.10.3 Name TWO examples of oligopoly industries mentioned in the article above.
(2)
4.10.3 Briefly describe the term cartels.
(2)
4.10.4 What effect does “uncompetitive industries” have on the economy? Substantiate
your answer.
(4)
4.11 Study the graph and answer the questions that follow
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ECON GRD 11 L B
4.11.1 Identify the market structure above.
(1)
4.11.2 What is the market price?
(1)
4.11.3 What type of profit will the above-mentioned market structure make in the long
term?
(2)
4.11.4 Determine whether this business makes a normal/ economic profit or a loss. Show
ALL calculations.
(6)
4.12 Study the table below and answer the questions that follow.
Price
Quantity
TR
TC
10
0
0
25
10
5
A
30
10
10
100
35
10
15
150
40
10
20
200
45
Profit
-25
20
65
B
155
4.12.1 Identify the market represented by the table.
4.12.2 What is represented by the -25 in the profit column above?
4.12.3 Determine the values of A and B.
4.12.4 Why is there a value for TC when production (quantity) is zero?
4.12.5 Present TR and TC on the same set of axes.
4.13 Study the cartoon below and answer the questions that follow.
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ECON GRD 11 L B
(1)
(1)
(2)
(2)
(4)
Source: businessbookmail.com
4.13.1 Which market structure is illustrated in the cartoon above?
(1)
4.13.3 What is the nature of the product in the cartoon?
(1)
4.13.3 Briefly describe the concept collusion.
(2)
4.13.4 Why is it more beneficial for firms to collude instead of engaging in competition?
(2)
4.13.5 Evaluate the impact price fixing has on the poor?
(4)
4.14 Study the graph below and answer the questions that follow.
4.14.1 Identify the profit maximisation quantity in the graph above.
(1)
4.14.2 Which curve is also known as the supply curve?
(1)
4.14.3 Define the term marginal revenue.
(2)
4.14.4 Why is the MC curve of a monopoly not intersecting the ATC at the minimum
point?
(2)
4.14.5 Determine whether the firm represented in the above graph is making a profit
or a loss.
(4)
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4.15
Study the graph below and answer the questions that follow.
4.15.1 Which market structure is represented by the graph?
4.15.2 What does the shaded area represent?
4.15.3 Briefly explain the concept price taker.
4.15.4 Why is the demand curve of this market structure a horizontal line?
4.15.5 Explain why a perfect market firm makes normal profit in the long run?
(1)
(1)
(2)
(2)
(4)
HINT: All section B questions have TWO 8 marks questions, numbered according to questions not like in this document.
QUESTION 5
Paragraph type questions – Middle Cognitive
Each question count 8 marks – thus you must give at least 4 facts
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
5.1.
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Differentiate between product market and factor market.
(8)
Examine the implication of ‘non price competition’ in oligopolies.
(8)
Briefly discuss nature of the product and price control as characteristics of
monopolistic competition.
(8)
Discuss barriers to entry and collusion as some of the determinants of market
structures.
(8)
Briefly explain the characteristics of an oligopoly.
(8)
Briefly discuss the SMART principle in designing the objectives of business.
(8)
Briefly discuss nature of the product and entry as characteristics of a perfect
markets.
(8)
Distinguish between natural and artificial monopolies.
(8)
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5.9
Discuss competition and transport and communication as characteristics of
perfect markets.
(8)
5.10 Discuss non-price methods to increase market share.
(8)
5.11 Examine the disadvantages of a monopoly as a market structure.
(8)
5.12 Explain interdependence of firms and non-price competition as characteristics of
an oligopoly.
(8)
5.13 Discuss FOUR characteristics of a perfect market.
(8)
5.14 What would producers benefit by producing at a level that allows them to
experience economies of scale.
(8)
5.15 With the aid of a formula, explain the relationship between average and
marginal revenue when price is constant at all levels of output.
(8)
5.16 With the aid of graphs explain the type of demand curve, type of profit and
profit maximizing points of the oligopolist and the monopolistic firm.
(8)
5.17 Compare Perfect competition and the Monopoly in terms of entry and price
control.
(8)
5.18 Briefly explain how oligopolies can increase their market share.
(8)
5.19 Compare the nature of the product and ease of entry, as characteristics
of a perfect market, with that of an oligopoly.
(8)
5.20 Discuss non-price methods to increase market share.
(8)
5.21 Briefly discuss the demand curve of the monopolist.
(8)
5.22 Distinguish between TWO types of profit.
(8)
5.23 Discuss the characteristics of monopolistic competitor.
(8)
5.24 Explain the terms price makers and completely blocked entry in terms of
a monopoly.
(8)
5.25 Discuss the impurities in perfect markets.
(8)
5.26 Distinguish between natural and artificial monopolies.
5.27 Differentiate between accounting profit and economic profit.
(8)
5.28 Distinguish between Fixed costs and Variable costs.
(8)
5.29 Discuss the characteristics of monopolistic competition.
(8)
QUESTION 6
Paragraph type questions – Higher cognitive
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking,
where candidates should be able to apply their knowledge, through logical reasoning and also have
an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
How can changes in the product market effect the factor market?
(8)
How can fast food outlets, namely KFC and Nando’s, compete without using
market price?
(8)
Examine the positive impact of competition on markets.
(8)
How would collusion between companies negatively impact on the consumers?
(8)
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6.5
6.6
How do legal barriers prevent new businesses from entering a specific type
of market?
Why is collusion among Oligopolists illegal?
(8)
SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document. In the
examination you will need to answer only one.
TYPICAL EXAM QUESTIONS
ESSAY STRUCTURE
: All section C questions have TWO questions 5 & 6 NOT like in this document. In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK ALLOSTRUCTURE OF ESSAY:
CATION:
Introduction
Max 2
The introduction is a lower-order response.
• A good starting point would be to the main concept related to
the question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss
in the body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ CritiMax 26
cally discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/
Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly
Max 10
debate/ How/ Suggest/ Construct a graph
Conclusion
Any Higher or conclusion include:
Max 2
• A brief summary of what has been discussed without repeating facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
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• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
40
[40]
QUESTION 7
(MARKET STRUCTURES)
40 MARKS
• Discuss in detail the characteristics of a perfect market.
(26)
• Examine the positive impact of competition on markets.
(10)
A maximum of 8 marks allocated for headings/sub-headings and examples)
QUESTION 8
(MARKET STRUCTURES)
40 MARKS
• Discuss in detail the characteristics of a perfect market.
(26)
• Briefly highlight how the perfect market differs from that of a monopolistic market.
(10)
QUESTION 9
(MARKET STRUCTURES)
40 MARKS
• Discuss in detail the characteristics of a perfect market
• Examine the positive impact of competition on markets.
(26)
(10)
QUESTION 10
•
•
Discuss the FOUR broad types of market structures.
(26)
Determine which market structure KFC operates in and give a reason for your answer. Draw a graph that shows economic profit for KFC.
(10)
QUESTION 11
•
Discuss in detail the characteristics of an oligopoly.
(26)
•
Use a graph and explain why oligopolists are reluctant to compete on prices.
(10)
QUESTION 12
•
Discuss the Oligopoly as an imperfect market structure and pay specific attention
to its characteristics and general behaviour.
(26)
•
Why is collusion among Oligopolists illegal?
(10)
[40]
QUESTION 13
•
Compare in detail, the features of a monopoly with those of monopolistic competition.
(26 marks)
•
Why would government support or license monopolies?
(10 marks)
[40]
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QUESTION 14
•
•
Discuss in detail the characteristics of an oligopoly.
(26 marks)
Explain without the use of a graph why oligopolies are reluctant to compete based
on price.
(10 marks)
QUESTION 15
• Compare the market structure of a perfect with that of a monopoly (in detail)
using the characteristics. ( No graphs required)
(26 marks)
• With reference to the graphs, explain how the price formation process
takes places in the perfect market.
(10 marks)
QUESTION 16
• Compare the market structure of a the oligopoly with that of a monopoly (in detail)
using the characteristics. ( No graphs required)
(26 marks)
• With the aid of a graph, explain fully the graph of an oligopolist.
(10 marks)
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MICROECONOMICS
TOPIC 3: ELASTICITIES (WEEK 5 TO 6)
TERM
Ceteris paribus
Complements
Consumer equilibrium
Cross elasticity of
demand
Demand
Elasticity
Income elasticity
Income elasticity of
demand
Inelastic
Inferior goods
Law of demand
Law of diminishing
marginal utility
Luxury goods
Marginal utility (MU)
Negative marginal
utility
Normal goods
Positive marginal
utility
Price discrimination
Price elasticity of
demand
Price elasticity of
supply
Substitutes
Total utility (TU)
Utility
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DESCRIPTION
If all other factors remains the same
Two or more products that are connected in some manner to each
and can be used together, e.g. bread and butter
When consumer make choices about quantity of goods and services
it is presumed that the objective is maximum total utility
This is the relationship between changes in the price of one product
and the resulting changes in the quantity demanded of another product.
The quantity bought by customers at different prices
This is a measure of responsiveness or sensitivity
Measures the responsiveness of the quantity demanded against
changes in income
It shows how sensitive the demand for a good is to change in income
Inelastic is an economic term used to describe the situation in which
the quantity of a good or service is unaffected when the price of that
good or service changes.
Negative income elasticity of demand as the income of consumers
rises, less demanded of these goods at each price level
The principle that a higher price for a good or a service, other things
equal, leads people to demand a smaller quantity of that good or
service
States that as a person increase consumption of a product there is a
decline in the marginal utility that the person derives from consuming each additional unit of that product
Goods that are not necessities, the change in income is less than
the change in the quantity demanded of these goods
The utility of an additional unit consumed / It is the additional satisfaction a consumer gains from one more unit of a good or service
It is when the consumption of an additional item decrease the total
utility
More is demanded of these goods at each price level as the income
of consumers rises
It is when the consumption of an additional item increases the total
utility
The practice of charging different prices to different sets of customers according to difference in price
Measured in % so we will be dealing with %change in price and the
quantity demanded
It measures the responsiveness of quantity supply to changes in
price.
Products that are so similar that they can be bought or used instead
of the original good
It is the amount of satisfaction a consumer gains from consuming a
given quantity of output
The satisfaction received from consuming a good or a service
ECON GRD 11 L B
𝑃𝑟𝑖𝑐𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 =
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝐷𝑒𝑚𝑎𝑛𝑑𝑒𝑑
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒
Formula 2
𝑃𝑟𝑖𝑐𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 =
𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝐷𝑒𝑚𝑎𝑛𝑑𝑒𝑑
𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒
There are five elasticity forms:
Elasticity form
Perfectly elastic demand
Relatively elastic demand
Elasticity of 1 (unitary elasticity)
Relatively inelastic demand
Perfectly inelastic
x
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒
𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑄𝑢𝑎𝑛𝑖𝑡𝑦
Value (meaning)
x=∞
1<x<∞
x=1
0<x<1
x=0
PRICE ELASTICITY OF DEMAND
Price elasticity of demand can be distinguished into 5 categories
• Perfectly inelastic demand
• Inelastic demand
• Unitary elasticity of demand
• Elastic demand
• Perfectly elastic demand
Degrees and curves of price elasticity of demand
PERFECTLTY ELASTIC DEMAND CURVE
Curve and value
Explanation
•
•
•
•
•
•
There is an infinite amount at a certain
price and smallest change in price results
to a large change in quantity demanded.
Consumers are willing to buy any quantity at certain price
It is also referred to as infinite elasticity.
(PED = ∞)
The price elasticity of demand is ∞.
To improve revenue always increase
price never decrease
This concept is theoretical and there is
not really an example
PERFECTLY INELASTIC DEMAND
Curve and value
Explanation
• There is no change in demand with
change in price
• This shows that consumers plan to buy a
fixed amount of the product,
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•
•
•
•
•
•
irrespective the price
Its referred to as perfectly inelastic

The price elasticity of demand is zero
(PED = 0)
It implies a change in price will cause
no change in the quantity that consumers demand
The curve is a vertical line, which means
that, no matter how price will change,
the demand will stay the same
Though it’s a theoretical concept it can
be applied to
Petrol – people continue to buy as much
as before even if there is an increase as
there is no substitute for petrol
RELATIVELY ELASTIC DEMAND CURVE
Curve and value
Explanation

• Occurs when the change in quantity
demanded is more than the percentage change in price
• The demand for such commodity is
said to be elastic. PED›1.
• The relative elastic demand curve is
flatter and its slope is inclined more towards the quantity-axis
• Price elasticity is greater than one, but
less than infinity 
• To improve revenue price should be
reduced
RELATIVELY INELASTIC DEMAND CURVE
Curve and value
Explanation
• Occurs when quantity demanded is
less than percentage change in price
(does not respond as strongly to
changes in price)
• Price elasticity is less than one but
greater than zero (Value of PED is between 0 and 1)
• The curve is steeper and its slope is inclined more towards price-axis
• To improve revenue, prices should be
increased
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• Examples are cigarettes and alcohol as
these are habit forming and users are
only very slightly sensitive to changes in
price (Addiction)
UNITARY ELASTIC DEMAND CURVE
Curve and value
Explanation
• When a percentage change in price
causes exactly the same percentage
change in quantity demanded
• PED = 1
• If a price increases by 10%, quantity demanded also increases by 10%
• The value of elasticity is equal to one
• Price changes have no effect on revenue
HINT: Learners must know their concepts well, as this will assist in a better understanding
of the content in general. Leaners are encouraged to revise with these type of questions,
KNOW THE DEFINITION AND THE GRAPH ASSOCIATED WITH IT. Practice the drawing of these basic elastic curves, it will come in handy in Grade 12
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SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 A change in the quantity requested as a result of a change in income is referred
to as … elasticity.
A
price
B
income
C
offer
D
supply and income
1.1.2 A positive value of cross elasticity of demand will …
A.
move in the opposite direction to price.
B
not be influenced by price.
C
move in the same direction as price.
D
be independent of the related goods.
1.1.3 Total utility can be defined as …
A
difference in measurements of utility.
B
satisfaction gained from consuming the last unit.
C
measure of the value of satisfaction.
D
total satisfaction gained by adding up all utils.
1.1.4 If the price of a packet of cigarettes has gone up, the quantity demanded also
goes up then the demand for cigarettes is …
A
perfectly elastic.
B
elastic.
C
inelastic.
D
unitary elastic.
1.1.5 An economic term used to describe the situation in which the quantity of a good or
service is unaffected when the price of that good or service changes
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A
B
C
D
inelastic
elastic
elasticity
unitary elastic
1.1.6 The income elasticity of demand for an inferior good, for example paraffin, will
be…
A
less than 0
B
equal to 1
C
greater than 1
D
less than 1
1.1.7 Elasticity of income is ... if Ey = 0
A
relatively inelastic
B
relatively elastic
C
completely inelastic
D
completely elastic
1.1.8 The responsiveness of the quality demanded of a particular good against changes
in the price of a related good is deferred to as ... elasticity.
A
price
B
income
C
supply
D
cross
1.1.9 Satisfaction derived from consuming a product is own as ... utility
A
average
B
marginal
C
total
D
average variable price
1.1.10 The effect of brand loyalty is to make the demand for the product more price ...
A
elastic.
B
inelastic.
C
unitary elastic.
D
perfectly elastic.
1.1.11 A change in quantity demanded due to change in income is referred to as …
elasticity
A
income
B
supply
C
supply and income
D
cross
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1.1.12 One of the following is amongst the factors that determine price elasticity of demand.
A
Availability of natural resources
B
Capital goods
C
Time
D
Increase in risk
1.1.13 The greater the proportion of the consumer’s income spent on the product, the
more price ... the demand for it is.
A
elastic
B
inelastic
C
unit elastic
D
perfectly inelastic
1.1.14 The satisfaction that we get from consuming goods and services is known as ...
A
scarcity.
B
utility.
C
opportunity cost.
D
necessity.
1.1.15 The effect of brand loyalty is to make the demand for the product more price …
A. Elastic.
B. Inelastic.
C. Unitary elastic.
D. Perfectly elastic.
1.1.16 Change in quantity demanded due to changes in income is referred to
as … elasticity.
A. income
B. supply
C. supply and demand
D. cross
1.1.17 A change in quantity demanded of product A, due to a change a change in price
of product B is referred to as … elasticity
A. income
B. cross
C. price
D. demand
1.1.18 … goods are goods for which demand increases as consumer income rises.
A. Inferior
B. Luxury
C. Normal
D. Elastic
1.1.19 When the percentage change in quantity supplied is greater than the percentage
change in price it refers to …
A. price elastic supply
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B. price inelastic supply
C. unitary elasticity of supply
D. zero elasticity of supply
1.1.20 The more a variable input is used, while all the other inputs are being kept constant, then each additional unit of the variable input will eventually produce less additional
output. This is called…
A. the law of demand.
B. the law of diminishing returns.
C. diminishing marginal utility.
D. marginal cost.
1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Income elasticity of demand.
1.2.2 Negative
marginal utility.
1.2.3 Relative elastic
demand.
1.2.4 The law of
demand.
1.2.5 Marginal cost
1.2.6 Elastic
1.2.7 Inferior
1.2.8 Consumer
equilibrium
1.2.9 Value
1.2.10 Ceteris paribus
COLUMN B
A When the proportionate change produced in demand is
greater than the proportionate change in price of a product.
B The cost of producing one extra unit of output, it can be
found by calculating the change in total cost when output is
increased by one unit.
C With other conditions remaining the same, other things
being equal.
D The solution to the consumer's problem, which entails decisions about how much the consumer will consume of a
number of goods and services.
E When the consumption of an additional item decreases
the total utility.
F States, all other factors being equal, as the price of a
good or service increases, consumer demand for the good or
service will decrease, and vice versa.
G Is an economic term referring to the change in behaviour
that buyers and sellers have in response to a price change for
a good or service.
H An increase in income reduces demand for the good.
I
The power that goods or services have to command
other goods or services in exchange.
J Measures the responsiveness of demand to a change in
income.
HINT: Learners must know their concepts well, as this will assist in a better understanding of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms and examples will be accepted.
1.3.1 The relationship between the change in the price of one product and the quantity
demanded of another item.
1.3.2 The price of a good or service, in terms of another good or service
1.3.3 The total satisfaction gained from consuming a product.
1.3.4 The cost advantages due to the larger size of production.
1.3.5 When there is no change produced in the demand of a product with change in its
price
1.3.6 An increase in income without a change in quantity demanded.
1.3.7 Change in behaviour that buyers have in response to a price change for a good or
service.
1.3.8 The power that goods or services have to command other goods or services in exchange.
1.3.9 This law states that the quantity producers are willing to sell decreases when the
price decreases and the quantity supplied increases when the price increases if all
the other factors remain unchanged.
1.3.10 A good whose demand rises as income rises is called
1.3.11 The relationship between the change in the price of one product and the quantity
demanded of another item.
1.3.12 A change in price that causes exactly the same change in quantity demanded.
1.3.13 The increase in total cost when one additional unit of output is produced
1.3.14 It states the inverse relationship between quantity demanded and prices.
1.3.15 Goods that have a negative income elasticity of demand
1.3.16 The change in demand is equal to the change in price.
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely one or two words. This MUST be done in bullet form. This types of
questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6
2.7
2.8
2.9
List any TWO ways a firm can increase its scale of operations
Name any TWO determinants of the price elasticity of demand.
State any TWO degrees of price elasticity of supply.
Give TWO factors influencing the price elasticity of supply.
List any TWO factors determining the price elasticity of demand
List any TWO categories of price elasticity of demand.
Name any TWO types of supply elasticity.
List any TWO factors that influence the elasticity of demand.
Name any TWO features of utility.
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(2).
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
QUESTION 3:
HINT: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
How does scarcity impact on total utility?
(2)
Why is it important for businesses to evaluate price elasticity of demand? (2)
What effect does a price elastic demand have on a producer, should the
price of a product increase?
(2)
Why are productively efficient firms make use of cost curves in perfectly
competitive market?
(2)
Why is the cross elasticity of demand important?
(2)
Why is the quantity demanded of habit-forming products, price inelastic? (2)
How does durability affect elasticity of demand?
(2)
What happens to the quantity demanded if the income elasticity of demand
is 2 and income increases by 7%?
(2)
Why would a producer of a product with a unitary price elastic demand not use
price to increase profits?
(2)
What price elasticity would a supply curve have if it intercepts the horizontal
(quantity) axis?
(2)
What effect does a price elastic demand have on a producer?
(2)
How would a firm benefit from considering the price elasticity of demand
before changing prices?
(2)
DATA RESPONSE
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4:
4.1. Study the cartoon below and answer the questions that follow.
4.1.1 Identify the phenomenon depicted by the cartoon.
4.1.2 Name ONE example of normal goods.
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(1)
(1)
4.1.3 Explain the term perfectly inelastic demand.
4.1.4 A product has a price elasticity of 1,58. What kind of elasticity
of demand does it represent? Motivate your answer.
4.1.5 Why is the elasticity of demand important to producers?
4.2
(2)
(4)
Study the table below and answer the questions that follow.
4.2.1 What type of cross elasticity is depicted in the above table?
4.2.2 Give ONE example of goods for cross elasticity of demand above.
4.2.3 Briefly describe the term cross elasticity of demand.
4.2.4 Explain cross elasticity of demand for unrelated goods.
4.2.5 Use the information above calculate the cross elasticity of demand.
4.3
(2)
(1)
(1)
(2)
(2)
(4)
Study the extract below and answer the questions that follow:
In January a small pizza shop received 350 boxes
of Margherita pizzas and 200 boxes of cheese from
its supplier. They sold each box of Margherita pizzas at R30 and a box of cheese at R35. The following month (February) pizza prices increased to
R42 for margherita and R49 for cheese. In the
same month (February) the supplier increased the
number of boxes supplied from 350 to 441 boxes
for Margherita pizzas and from 200 to 252 boxes
for cheese.
4.3.1
4.3.2
4.3.3
4.3.4
What is depicted by the extract above?
Indicate the slope of the supply curve.
Briefly describe the term price elasticity of supply.
Explain any challenge that may be experienced by producers when
they have to increase supply in the short run.
4.3.5 Calculate the elasticity of supply for cheese.
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(1)
(1)
(2)
(2)
(4)
4.4
Study the following graphs and answer the questions that follow
4.4.1 Which picture represents a perfectly inelastic price elasticity of demand? (2)
4.4.2 Briefly describe the term elasticity of demand in full.
(2)
4.4.3 Why is the change in the quantity demanded larger than the change in price in
picture B?
(2)
4.4.4 Calculate the price elasticity of demand (PEd) for picture B.
Show ALL calculations.
(4)
4.5
Study the graph below and answer the questions that follow.
4.5.1 Provide the correct label for curve ‘aa’.
(1)
4.5.2 If the price would increase from R10 to R15, what is the quantity of goods
that would be demanded?
(1)
4.5.3 Briefly explain price elasticity of demand for luxury goods.
(4)
4.5.4 Using information from the graph, calculate and indicate the type of price
elasticity of demand.
(4)
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4.6
Study the graph given below and answer the questions that follow.
4.6.1 According to the graph above, what kind of an elasticity of demand is represented
in the graph?
(2)
4.6.2 Briefly explain the kind of elasticity of demand represented in the above graph.
(6)
4.6.3 Give an example of a product with the same kind of elasticity of demand represented
in the above graph.
(2)
4.7
Study the graphs given below and answer the questions that follow.
4.7.1 Briefly describe the term Elasticity of demand.
(2)
4.7.2 Identify the degrees of elasticity as shown in the above Graph A and B.
(4)
4.7.3 Distinguish between the TWO types of elasticity of demand in the
above two graphs.
(4)
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4.8
Study the article below and answer the questions that follow
How income and price changes affect demand
When economists tell us that the demand for basic food products is ‘inelastic’, this is frequently misunderstood to mean that demand will not decrease
if food prices are increased.
In reality, it only means that the quantity demanded will decrease by a
smaller percentage than the increase in prices.
In addition to the response of demand to price change (price elasticity).
Change in income affect the quantities demanded (income elasticity)
If demand increase by a higher percentage than the increase in prices (elastic demand) gross income will decrease, if the quantity demanded decreases
by a lower percentage gross income will increase
4.8.1
4.8.2
4.8.3
4.8.4
Give a reason why food has an inelastic demand.
Name ONE example of normal goods.
Briefly describe the term income elasticity.
Will a producer with a unit elastic demand use price to increase profits?
Explain.
4.8.5 Why is the demand elasticity of importance to the economy?
4.9
(1)
(1)
(2)
(2)
(4)
Study the graph below and answer the questions that follow:
4.9.1
4.9.2
4.9.3
4.9.4
Identify the type of elasticity illustrated above.
What is the PED of this type of elasticity?
Explain the type of elasticity illustrated above.
Which type of goods would fall under this type of elasticity? Give a
reason for your answer.
4.9.5 Of what benefit is this type of elasticity to the seller?
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(1)
(1)
(2)
(2)
(4)
4.10
Study the table below and answer the questions that follow.
4.10.1 What type of cross elasticity is depicted in the above table?
(1)
4.10.2 Give ONE example of goods for cross elasticity of demand above. (1)
4.10.3 Briefly describe the term cross elasticity of demand.
(2)
4.10.4 Explain cross elasticity of demand for unrelated goods.
(2)
4.10.5 Using the information above calculate the cross elasticity of demand.
Show ALL calculations.
(4)
4.11
Study the table below and answer the questions that follow
4.11.1 Name the product with the highest price inelasticity of demand.
(1)
4.11.2 Explain perfectly inelastic demand.
(2)
4.11.3 Apples have a price elasticity of - 0.58. What elasticity does this indicate?
Substantiate your answer.
(3)
4.11.4 How do we explain the price elasticity of the demand for cigarettes?(2 x 2) (4)
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4.12
Study the cartoon below and answer the questions that follow.
cartoonistgroup.com
4.12.1 Give the form of elasticity illustrated in the cartoon above.
(1)
4.12.2 State the relationship between the two products in the above cartoon.
(1)
4.12.3 Briefly describe the concept elasticity of demand in full.
(2)
4.12.4 What is the impact of the change in price of margarine on the demand for butter?
(2)
4.12.5 Assume the two products were being sold at the same price, the percentage
change in quantity demanded for butter is 20%. Calculate the cross elasticity of
demand for the two products. Show ALL calculations.
(4)
4.13 Study the table below and answer the questions that follow
Diminishing Marginal Utility
Muffins
1
2
3
4
5
Total Utility
10
13
14
12
9
Marginal Utility
12
3
1
-2
-3
4.13.1 According to the table above, how many muffins should this person consume?
(1)
4.13.2 What is the formula to calculate marginal utility?
(1)
4.13.3 Briefly describe the concept diminishing marginal utility.
(2)
4.13.4 Differentiate between economic profit and normal profit.
(2)
4.13.5 Why is it important for an entrepreneur to cover implicit and explicit costs? (4)
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4.14.Study the graph below and answer the questions that follow
4.14.1 What does the abbreviation TVC stand for?
4.14.2 Why is the FC curve horizontal?
4.14.3 Briefly describe the term long run.
4.14.4 Given that TVC= R235. How much are the total costs?
4.14.5 What is meant by marginal costs? Explain in detail.
(1)
(1)
(2)
(2)
(4)
SECTION B
HINT: All section B questions have TWO 8 marks questions, numbered according to
questions not like in this document. Answers must be presented in full sentences
QUESTION 5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
Paragraph type questions – Middle Cognitive
Briefly discuss relative inelastic demand without the aid of a graph.
(8)
Distinguish between elasticity and inelasticity of demand.
(8)
With the aid of a graph, explain the relationship between an increase in
consumption, total utility and marginal utility.
(8)
Discuss time and availability of labour as factors that determine price elasticity
of supply.
(8)
Briefly discuss any TWO characteristics of utility.
(8)
Elaborate on the importance of price elasticity of demand to producers.
(8)
What reasons would you give for the reaction of consumers to price changes?
(8)
Examine the reasons for unequal distribution of income in South Africa.
(8)
Compare positive and negative cross elasticity.
(8)
Briefly explain relative inelastic supply and unitary elastic supply as a degree
of price elasticity of supply, without the use of diagrams.
(8)
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QUESTION 6
Paragraph type questions – Higher cognitive
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking, where candidates should be able to apply their knowledge, through
logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
6.11
6.12
How can the government benefit from having knowledge on elasticity of demand?
(8)
Why is demand elasticity of importance to the economy?
(8)
Why are relative prices important in the economy?
(8)
How would it help the entrepreneur to increase or decrease the price of his
product if he is aware of the elastic of demand curve?
(8)
Explain the importance of price elasticity of demand to producers.
(8)
Explain the price elasticity of supply for maize in the short and long term. (8)
Examine the importance of income elasticity of demand to businesses.
(8)
In which way would knowledge of price elasticity of demand support an
entrepreneur to decide if he must adjust the profit levels?
(8)
Briefly debate whether a supplier of chocolates and a supplier of petrol
would both use price increases to increase their profits.
(8)
Explain the price elasticity of supply for maize in the short and long term. (8)
What reasons would you give for the reaction of consumers to price
changes?
(8)
What is the importance of elasticity of demand to the economy?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOSTRUCTURE OF ESSAY:
CATION:
Introduction
Max 2
The introduction is a lower-order response.
• A good starting point would be to the main concept related to the
question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically
Max 26
discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Draw a
graph and explain/ / Calculate/ Deduce/ Compare/ Explain Distinguish /
Interpret/ Briefly debate/ How/ Suggest / Construct a graph
Max 10
Conclusion
Any Higher or conclusion include:
Max 2
• A brief summary of what has been discussed without repeating facts
already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
40
QUESTION 7
(PRICE ELASTICITY OF SUPPLY)
40 MARKS
• With the aid of graphs describe the various categories of price elasticity of supply.
(26)
• Explain the price elasticity of supply for maize in the short and long term. (10)
A maximum of 8 marks allocated for headings/sub-headings and examples)
QUESTION 8
(PRICE ELASTICITY OF DEMAND)
40 MARKS
• With the aid of graphs, explain in detail the different categories of demand elasticity.
(26)
• Briefly debate whether a supplier of chocolates and a supplier of petrol would both
use price increases to increase their profits
(10)
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QUESTION 9
PRICE ELASTICITY
• With the aid of relevant graphs, discuss FIVE degrees of price elasticity of demand
(26)
• A couple of factors are determents of the elasticity of demand. Briefly discuss substitution possibilities as one of those factors.
(10)
QUESTION 10
PRICE ELASTICITY
With the aid of graphs, discuss the following types of price elasticity of demand:
• Perfectly inelastic. (8)
• Relatively elastic
(8)
• Unitary elasticity
(10)
(26)
Evaluate the reasons for consumer reactions to price changes.
(10)
QUESTION 11
PRICE ELASTICITY
•
•
Discuss in detail, the different degrees of demand elasticity.
(No graphs required)
Evaluate how a monopolist like Eskom can benefit from using the price
elasticity of demand for their product.
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(26)
(10)
ECONOMIC PURSUITS & CONTMEPORARY ECONOMIC ISSUES CONTENT PROGRESSION
Grade 10
Growth, Development & Globalisation /
Economic Redress
Unemployment
Grade 11
Grade 12
Examination and debate of globalisation, its relevance to the North/South divide, and its effects (negative and positive) on South Africa.
Explanation of economic growth and development
Econ Growth and Development (North/South divide) Comparison
of South African growth and development policies in terms of
international benchmarks, and highlight the North/South divide
South Africa’s industrial development policies and their suitability
in terms of international best practice
Economic and Social Indicators
None
Factors of production and their remuneration (Term
1)
None
None
None
Tourism
Environment deterioration
Environmental sustainability
Population and Labour force
Factors of production and their remuneration (Term
1)
Labour Relation
Composition of Money and Banking in SA
Wealth creation and patterns of distribution (inequality)
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Inflation
ECONOMIC PURSUITS:
TOPIC 1: ECONOMIC GROWTH (WEEK 7-9)
Wealth
creation
Wealth
distribution
ECONOMIC
GROWTH
Standard
of Living
Affirmative
action in SA
Economic
Growth
1 ECONOMIC GROWTH AND DEVELOPMENT
Key Concepts
Wealth
Income
Economic Growth
Economic Development
Income distribution
Wealth distribution
Lorenz Curve
Land Restitution
Real GDP
Nominal GDP
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Description
Is the stock/value of assets accumulated overtime or owned by individuals, businesses and government
Is the amount of money earned by factors of production for participating in economic activities.
Is the increase in the productive capacity of the economy/country over
a certain period of time? It is measured by the percentage change in
the real GDP in a certain period, usually a year
s an increase in of the standard of living of people in a country? It includes the improvement of health, education, infrastructure and living
conditions in general
Shows how the total income is distributed among its population, this
may be even or uneven.
It is unevenly distributed in all societies, but more obvious in free market economies than in centrally planned systems
Is a graphical representation of how uneven the distribution of income
/quintile distribution of income
Policy that consists of the state buying land from the present owners
and giving it to those who had their land confiscated during the apartheid years.
is GDP after the increase in the general price level has been taken
into account, GDP deflator index is used to remove effects of inflation
(adjusted to inflation)
It doesn’t give a true picture of economic growth, as the increase in
general price level (inflation) is not taken into account/considered.
2.
WEALTH CREATION PROCESS
Definition of wealth
Is the stock/value of assets accumulated overtime or owned by individuals,
businesses and government
Income
Is the amount of money earned by factors of production for participating in
economic activities?
Sources of wealth
• Inheritance
• Savings
• Gifts
• Appreciation of assets
• Luck (winning lottery and jackpots)
• profits
Methods to create wealth
• Wealth creation is the process of increasing your stock of assets
Methods:
• Education and training
• Savings
• Investment
3.
DISTRIBUTION
Income distribution: Shows how the total income is distributed among its
population, this may be even or uneven.
Wealth distribution: It is unevenly distributed in all societies, but more obvious in
free market economies than in centrally planned systems.
Inequality: Means there is a big difference between income and levels of wealth
of the richest and the poorest households/countries
Quintile ratio is used to measure income inequality between different groups of
people.
It is obtained by dividing the income of the highest 20% by the income the lowest
20%
Gini Coefficient: Is a statistic that can be used to measure the degree of
inequality in the distribution of income, is calculated using the Lorenz curve
Lorenz curve is a graphical representation of how uneven the distribution of
income /quintile distribution of income.
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Redistribution methods:
• Taxation
• Social security programmes/grants
• Minimum wage
• Free benefits
• Subsidised services
• Job creation programmes Land redistribution
• Redress policies
• Reducing discrimination
4
ECONOMIC GROWTH
• Is the increase in the productive capacity of the economy/country over a
certain period of time
• It is measured by the percentage change in the real GDP in a certain period, usually a year
• It is important because it provides citizens with more job opportunities.
Calculation
Nominal GDP – doesn’t give a true picture of economic growth, as the increase in
general price level (inflation) is not taken into account/considered.
Formula: output multiplied by average price
Real GDP – is GDP after the increase in the general price level has been taken
into account,
GDP deflator index is used to remove effects of inflation (adjusted to inflation).
The real GDP cannot be used to determine income distribution in a country, but
must be divided by the size of the population to obtain: real GDP per capita
An increase in real GDP indicates economic growth, while increase in real GDP
per capita Indicates:
economic development (increase in the standard of living of the population.
To calculate the GDP deflator:
GDP deflator = average price for current year X 100
average price for the base year
Once the GDP deflator has been calculated, real GDP can be calculated
Real GDP = nominal GDP X 100
GDP deflator
Importance
Benefits of economic growth
• Reduce unemployment
• Reduce poverty
• Income increase
• Increase in government revenue
• Reduce government expenditure
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Methods
• Increase in productivity
• Especially labour productivity
• The availability of production factors
• All four factors of production
• Increase in investment
• Capital widening and capital deepening
• Technological development
• Inventions, scientific discoveries and innovation
• Improvement in infrastructure
Constraints on growth
• Lack of appropriate skills
• Low levels of entrepreneurship
• Too many regulations
• Shortage of infrastructure
• Lack of management skills
• Poverty and unemployment
• High value of the rand
SA’s recent growth experience
• By world’s standards, the economic growth rate in South Africa is fairly low
• Real GDP did increase when compared with years before 1994
• The global recession of 2009 had a great impact on South African economy.
• The impact of Covid 19 continues to be felt on the economy and potential
growth
5.
STANDARD OF LIVING
Definition
• The quality of life of an individual/household (welfare)
• Measured by the quantity of goods and services available to the population
of a country on average.
• Economic growth is essential for an improvement in standard of living
Population size
• The standard of living of the population of a country is influenced by the
size of the population
Per Capita income
• Is the average income received by every person in the country?
• Is calculated by dividing the real GDP by the total population.
• The standard of living is measured in terms of the total income earned percapita; this method is useful for comparing standard of living between countries.
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6.
ECONOMIC DEVELOPMENT
Definition
• Is an increase in of the standard of living of people in a country. It includes
the improvement of health, education, infrastructure and living conditions in
general
• Economic development is linked to economic growth
Methods of development
• Attracting new businesses
• Building community capacity
• Building economic partnerships
• Expanding local markets/development of industries
• Using out-dated facilities – sustainable development
• Promoting direct investment – capital formation
• Natural resources – effective utilisation.
Common characteristics
Low standard of living: Low per capita income, slower growth of the per capita income,
unequal distribution of income, poverty, low life expectancy, education
Low levels of productivity: Lack of necessary skills, expertise, poor health, poor nutrition High population growth and dependency burdens: High birth rates, high population
cause problems (unemployment, pressure on housing, education and health services),
younger children and elderly people (non-productive) cause a dependency burden
High levels of unemployment: Very few job opportunities for large number of unemployed people, low levels of literacy, low levels of technological skills
Dependence on primary sector: A high proportion of people is employed in the primary
sector. Most exports are in this sector
Deficiency of infrastructure: In most developing countries, the major problem is infrastructure is lacking or poorly maintained. This results in poor access to markets
Developing strategies
Improve the quality and quantity of factors of production: Natural resources, capital
formation, human resources, entrepreneurship
Use of technology by accessing modern technology
Improve the infrastructure: Investment will expand a range of opportunities
Job creation
Government policies
SA’s endeavours (best efforts)
The government had to set new policies, implement programmes and strategies to develop a new democratic society to improve people’s quality of life, which are:
Reconstruction and Development Programme (RDP)
Growth, Employment and Reconstruction (GEAR)
Accelerated and Shared Growth Initiative for South Africa (AsgiSA)
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Some of the endeavours are:
• Provision of basic services (housing subsidies, free electricity, water, sanitation)
• Creating stability in the economy
Regional level (Spatial Development Initiatives (SDIs) by DTI
Continental level (Industrial Development Zones (IDZs)
Global level (Integrated Manufacturing Strategy (IMS) to improve international competitiveness and being member of BRICS to improve cooperation between countries.
Human Resource Development (HRD)
New Growth Path (NGP) to reduce unemployment
The Government’s electoral mandate (five priorities)
• Transform the economy
• Implement a rural development strategy
• Provide an affordable education system
• Create a national healthcare system
• Fight crime and corruption.
The way forwards (areas that need to improve for SA to move forward)
• Speeding up growth and transforming the economy
• Fighting poverty and building social cohesion
• International co-operation
• Building an effective development state
The target year for achieving Millennium Development Goals was 2015
Indigenous Knowledge Systems (IKS)
• It is sometimes called traditional knowledge
• Is the local knowledge that is unique to a certain culture or society.
• Are a complex set of knowledge, skills and technologies which is part of African philosophy and social practises which developed over many centuries
• Since 1994 SA has accepted that indigenous knowledge has value and
must be researched and preserved.
• The IKS policy was adopted by the Cabinet in 2004
Elements of IKS
• Political element (all authority systems)
• Social/cultural element (religion and belief systems)
• Economical element (agriculture, mining and manufacturing)
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SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
: When answering Section A – short question, it is important not to rush but
to read the questions carefully and to make sure you understand what the
question is asking. Always remember one alternative is completely wrong,
one is nearly correct and one is totally correct. It is easy to eliminate the completely
wrong answer, but if you do not read the question carefully the nearly correct answer
will also appear correct. The answer will NEVER be two options. Only ONE option is
correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 A graph that shows how uneven the distribution of income is between households
is called the ...
A
Laffer curve.
B
Philips curve.
C
Circular flow.
D
Lorenz curve.
1.1.2 High-income earners are taxed at a higher rate:
A
Proportional
B
Regressive
C
Progressive
D
Indirect tax
1.1.3 The standard of living of a population is best described by the …
A
per capita income.
B
low economics growth.
C
decrease in expenditure.
D
secondary education.
1.1.4 This is used to help beneficiaries acquire ownership of fixed residential property.
A
Property subsidy
B
Land restitution
C
Land redistribution
D
BEE
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1.1.5 The value of the Gini-coefficient ranges between...
A
0 and 1
B
10 and 100
C
1 and 10
D
100 and 1000
1.1.6
Refer to the graph above
What happens if the curve is away from the line of equality.
A
Constant inequality
B
Less inequality
C
Greater degree of inequality
D
Average inequality
1.1.7
… measures the economic growth in percentage from one period to another.
A
Real economic rate
B
Economic growth rate
C
Inflation
D
GDI
1.1.8 An increase in the production of goods and services in a country over a year in
physical terms is known as ...
A
Economic development.
B
Economic growth.
C
Investment.
D
Capital formation.
1.1.9 The ... is used to measure the standard of living in a country.
A
Level of per capita income
B
Inflation
C
Balance of payment account
D
Producer price index
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1.1.10 Gini coefficient of ONE represents ... distribution of wealth in the economy.
A
perfectly equal
B
perfectly unequal
C
straight
D
identical
1.1.11 ... refers to the welfare of all people and their ability to maintain an
acceptable existence.
A
Poverty
B
Productivity
C
Standard of living
D
Economic growth
1.1.12 Why do female traditional healers implement a strategy for management of
indigenous knowledge systems?
A
To derive monetary gain
B
To contribute to the country’s GDP.
C
To improve the lives of rural communities
D
Compete with western knowledge systems
1.1.13 Indigenous knowledge systems are important to the community.
The following statements confirm the above except
A
It improves culture-fit problem-solving solutions
B
Key to sustainable development
C
Help understand international conditions
D
Contribute to global development process.
1.1.14 The following statement best argues the fact that SA has the most highly
developed telecommunications network in Africa.
A.
A stronger economy
B
More calls are made in South Africa compared to other African countries
C
Colonialism
D
International support
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 – 1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Wealth
1.2.2 Gini coefficient
1.2.3 Inheritance
1.2.4 Life
expectancy
1.2.5 Economic
Growth
1.2.6 Income
1.2.7 Standard of
living
1.2.8 Lorenz curve
1.2.9 Per capita income
1.2.10 Property subsidy
1.3
COLUMN B
A This expresses the number of years a new born
infant will live if the prevailing patterns of mortality
remain the same throughout this person’s life.
B Is the reward that owners of factors of production
receive for using it in the production process.
C Show how a nation’s wealth is distributed across its
population.
D This is used to help beneficiaries acquire ownership
of fixed residential property.
E A statistical measure used to express the inequality
of income distribution.
F When a county’s stock of capita increase at the same
rate as the workforce.
G The practice of passing on wealth from one
generation to the next.
H Financial assistance that need not to be repaid.
I Refers to the wealth, comfort, material goods and necessities available to a certain socio-economic class in a
certain geographical area
J A measure of the total output of a country and divide
it by the population size of a country.
K The increase in the production capacity of the
economy
L Value of all assets that individuals, businesses and
government own
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
1.3.5
1.3.6
Income per member of the population of a country.
The index that measures the inequality of income.
Relationship between the quantity of output and quantity of input.
A curve that shows how nation’s wealth is distributed across its population.
An institution that uses CPI to measure headline inflation.
Stock of capital assets of households, representing money earned and saved at
some point of time.
1.3.7 Shows whether the gross national income is divided equally among population
1.3.8 This term refers to purchasing from BEE qualifying businesses.
1.3.9 This term means fairness or evenness, and achieving it is an economic objective.
1.3.10 The level of wealth, comfort, material goods and necessities available to a certain
socioeconomic class in a certain geographic area.
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SECTION B
QUESTION 2:
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
Name TWO social indicators related to income distribution.
Name TWO factors that influence the income levels.
Name TWO factors that promote economic growth.
List TWO ways in which wealth can be created.
Mention any TWO uses of per capita GDP.
Mention any TWO methods the government use to distribute income.
(2x1)
(2x1)
(2x1)
(2x1)
(2x1)
(2x1)
QUESTION 3:
This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. They must
be answered in full sentences.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
How is the standard of living in a country determined?
(1x2)
What is the use of the Gini-coefficient?
(1x2)
How does wealth differ from income?
(1x2)
What effect does a low economic growth rate have on the economy?
(1x2)
Why does South Africa need to increase its economic growth rate?
(1x2)
What is the meaning per capita income?
(1x2)
What is income inequality?
(1x2)
What do we measure using the Lorenz curve?
(1x2)
What effect will an increase in the income tax rate have on the inequality gap
between the rich and the poor?
(1x2)
What effect will HIV/Aids have on future economic growth?
(1x2)
How important is economic growth in the economy?
(1x2)
DATA RESPONSE
All section B questions have TWO data interpretation questions –
each total 10 marks. Section B consist of Questions 2-4 not as
numbered in this document.
QUESTION 4.1:
4.1
Study the graph below and answer the questions that follows
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ECON GRD 11 L B
4.1.1. What is represented by the graph above?
(1)
4.1.2. In which year, was South Africa’s growth rate was at the lowest?
(1)
4.1.3. Describe the concept Gross Domestic Product.
(2)
4.1.4. Briefly explain why the South African growth rate was -2,0 in quarter 1of 2020.
(2)
4.1.5. Distinguish between economic growth and economic development.
(4)
4.2
Read the extract and answer the questions that follow
NDP 2030 – THE STATE CANNOT ACHIEVE OBJECTIVES ALONE
Growing SA’s skills base and supporting students from poor and middle-income
families is critical to the growth and development of SA’s economy.
According to a report released by the department of higher education and training, a very small number of people attend tertiary education institutions in South
Africa, the lowest of the five BRICS countries.
According to the NDP, active citizenry, where the citizens make strides in uplifting themselves and those around them, is needed in the last 10 years before
2030 for its objectives to be realized.
Source: Adapted from https://www.isfap.co.za/about-us/#.YNHJkWgzbIU
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4.2.1 Name any other development strategy that has been used in South Africa. (1)
4.2.2 Give an example of what the citizens of South Africa can do to uplift themselves.
(1)
4.2.3 Briefly describe the term economic development.
(2)
4.2.4 Explain the main aim of the National Development Plan.
(2)
4.2.5 How will South Africa’s skills base be improved through the NDP implementation?
(4)
QUESTION 4.3:
4.3
Study the graph below and answer the questions that follow:
4.3.1
4.3.2
4.3.3
4.3.4
Which economic concept is depicted in the graph above?
(1)
Provide the label for line A.
(1)
Briefly describe the term wealth.
(2)
Why does South Africa have one of the highest rates of inequality in the world?
(2)
4.3.5 Explain the relationship between the Gini coefficient and the Lorenz curve (4)
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4.4
Study the information below and answer the questions that follow:
LIFE EXPECTANCY TRENDS IN AFRICA
Africa Month - our continent celebrates from Rasben Sakka in Tunisia to
Cape Agulhas in South Africa
Life expectancy surged by over 20 percent in many countries between
2000 and 2016, according to World Bank figures. Much of this is due to
more affordable medication and the availability of antiretroviral drugs.
YEAR
LIFE EXPECTANCY AT
BIRTH WITHOUT HIV
LIFE EXPECTANCY
AT BIRTH WITH HIV
2014
2015
2016
2017
65,5
66,3
67,9
67,1
52,1
56,0
58,7
61,2
[Source: www.statssa.gov.za/Public Sector Manager - May 2017]
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Name the type of indicator under which life expectancy is classified
(1)
Give ONE reason for low life expectancy levels in Africa.
(1)
Explain the term life expectancy.
(2)
What impact will HIV/AIDS have on productivity levels
(2)
Evaluate the factors which brought about the improvement in life expectancy
from 52,1 years to 61,2 years
(4)
4.5 Study the curve below and answer the questions that follow.
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4.5.1
4.5.2
4.5.3
4.5.4
Which international institution provided the data in the extract?
(1)
When did the income disparities in South Africa increase drastically
(1)
Explain the term ‘Gini coefficient’
(2)
Explain why South Africa has one of the highest rates of inequality in the world.
(2)
4.5.5 Briefly describe any TWO constraints to economic growth.
(4)
4.6
Study the extract below and answer the questions that follow:
EDUCATION STATISTICS FOR SOUTH AFRICA
Education indicator
Enrolment in secondary school
Percentage
57% of total
possible
Enrolment in tertiary
education
15%
Literacy rate
88%
Effects on wealth creation
Almost half of the population does not get matric –
less likely to be employed.
Severe lack of degrees
and diplomas impact on
skills workforce – negative
impact on human capital.
Almost 12% of the population cannot read and writefew job prospects.
[Sourcehttps://en.mwikipedia.org]
4.6.1
4.6.2
4.6.3
4.6.4
4.6.5
What percentage is the enrolment in secondary education?
(1)
What impact does the literacy rate have on wealth?
(1)
What has led to the low enrolment in tertiary education?
(2)
Explain how lack of education can lead to low standard of living
(2)
How should higher education inequalities be addressed to improve the standard
of living of South Africa?
(4)
4.7
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Study the graph below and answer the questions that follows:
ECON GRD 11 L B
4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
Identify the curve (Z) in the above graph
What does the straight line OB imply?
Identify the shaded area (Y).
What is the relationship between line OB and curve Z?
Briefly explain the concept Gini coefficient.
(1)
(1)
(2)
(2)
(4)
4.8 Study the Gini Indexes for a selected group of nations in the table below, then answer the questions that follow:
Country
Japan
Sweden
Germany
France
Pakistan
Canada
Switzerland
Gini Index
24.9
25.0
28.3
32.7
33.0
33.1
33.1
Country
United Kingdom
Iran
United States
Argentina
Mexico
South Africa
Namibia
Gini Index
36.0
43.0
46.6
52.2
54.6
57.8
70.7
4.8.1
4.8.2
4.8.3
4.8.4
4.8.5
Name the curve that is used to represent the above data.
Which country has the highest income inequality?
Which country has the highest level of equality?
What is income distribution?
Convert the Gini Indexes to Gini coefficient for South Africa and France
4.9
Study the extract below and answer the questions that follow:
(1)
(1)
(2)
(2)
(4)
THE WEALTH CREATION PROCESS
Wealth can be inherited. When a person dies, his or her belongings may be
passed on to someone else. However, the wealth has to be created first.
[Adopted from ‘Solution for all’]
4.9.1 Mention ONE other sources of wealth other than inheritance.
(1)
4.9.2 Give an example of what the citizens of South Africa can do to uplift themselves.
(1)
4.9.3 Name TWO methods used to measure inequality of wealth.
(2)
4.9.4 What makes wealthy people to be essential in the economy?
(2)
4.9.5 Explain how individuals create wealth.
(4)
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4.10
Study the information below and answer the questions that follow.
INCOME AND WELATH REDISTRIBUTION IN SOUTH AFRICA
According to Mr Patrick Craven, spokesperson for Cosatu, the inequality must be
addressed in South Africa. 48% of the population must survive with an income of less
than R322 per month, while there are 20 people in South Africa who together own a
total of R112,2 billion.
This is a very sensitive issue, and one could ask what the reason for this inequality
is. The main reason why 24 million people are living below the poverty line is not that
the ‘super-rich’ have too much money, but that there are too many people with no
jobs.
The debate should be about whose responsibility it is to create jobs. Should it be the
state and public sector, as Cosatu suggested in its economic policy, or the private
sector companies that belong to the super-rich, who have built these companies, in
most cases, out of nothing?
(Source: Beeld, 6 September 2011)
4.10.1 Identify the stakeholder/ organisation concerned about income and wealth
distribution in South Africa.
(1)
4.10.2 What is the purpose of implementing redistribution methods?
4.10.3 Explain the term ‘living below the poverty line’.
4.10.4 Who should be responsible for creating job in the economy?
4.10.5 Differentiate between land redistribution and land restitution.
4.11
(1)
(2)
(2)
(4)
Study the information below and answer the questions that follow.
SOUTH AFRICA’S HDI RANKING
South Africa boasts of a highly-developed economy and advanced infrastructure.
It is a significant player on the African continent.
However, development has slowed down, and the nation has one of the highest
inequality rates in the world.
Global ranking:
113
Life expectancy:
63,4
GDP:
349,4 billion USD
Gross National Income Per Capita: USD 11,923
HDI ranking in Africa:
8
[Adapted from: africanexponent.com]
4.11.1 Name any characteristic of developing countries.
(1)
4.11.2 Which indicator is used in measuring HDI?
(1)
4.11.3 Briefly describe the term economic development.
(2)
4.11.4 Explain the use of per capita figures.
(2)
4.11.5 How can the South African government improve the quality of human
resource?
(4)
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All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
QUESTION 5.1
Paragraph type questions – Middle Cognitive
5.1.1
5.1.2
5.1.3
5.1.4
5.1.5
Briefly explain two main factors that causes economic growth.
(8)
Discuss reasons for the unequal distribution of income.
(8)
Differentiate between economic growth and economic development.
(8)
Differentiate between physical wealth and financial wealth.
(8)
Discuss the availability and use of factors of production as a way of growing
the economy.
(8)
5.1.6 Discuss how income is redistributed in South Africa.
(8)
5.1.7 Briefly explain ‘taxation’ as a method of redistributing income and wealth. (8)
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge, through logical
reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be
assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 5.2
Paragraph type questions – Higher cognitive
5.2.1 Critically evaluate the reconstruction and development programme as a
development strategy in South Africa.
(8)
5.2.2 Analyse savings as a method used to create wealth.
(8)
5.2.3 Discuss capital formation as an important determinant economic growth? (8)
5.2.4 Outline entrepreneurship as the determinants of wealth creation.
(8)
5.2.5 Evaluate South Africa’s approach to redistribute wealth and income.
(8)
5.2.6 How is the Lorenz curve related to the Gini coefficient?
(8)
5.2.7 Why are indigenous knowledge systems (IKS) important for the economic
development of a country?
(8)
5.2.8 Examine the impact of high population growth on a developing economy such
as South Africa.
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION:
STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
• A good starting point would be to the main concept related
to the question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/
Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/
Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly
debate/ How/ Suggest / Construct a graph
Conclusion
Any Higher or conclusion include:
• A brief summary of what has been discussed without repeating facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max 2
Max 26
Max 10
Max 2
40
QUESTION 7
•
•
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Discuss the methods used by the government to redistribute income and
wealth.
(26)
Why do we have uneven distribution of income?
(10)
[40]
ECON GRD 11 L B
QUESTION 8
•
Discuss in detail the following methods used to redistribute income and
wealth:
• Taxes
(10)
• Cash grants
(8)
• Natural benefits
(8)
• Examine the government’s efforts to redress economic inequality in South
Africa.
(10)
[40]
QUESTION 9
• Discuss the methods used to increase economic growth in detail. (26)
• How can human and natural resources be used to ensure economic
development?
(10)
[40]
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ECONOMIC PURSUITS
TOPIC 2: ECONOMIC DEVELOPMENT
(WEEK 1-3)
ECONOMIC DEVELOPMENT
Compare Economic Growth
& Development
Methods of development
Developing strategies
South Africa's endeavours
Indigenous knowledge systems
CONCEPTS
KEY CONCEPT
Accelerated and Shared
Growth initiative for
South Africa (ASGISA)
Basic needs
Capital goods
Dependency burden
Developed economy
Developing economy
Development strategy
Economic development
Economic growth
Gross domestic product
(GDP)
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DEFINITION/DESCRIPTION
An initiative to promote development strategies, e.g.
infrastructure and skills development
Essential requirements needed to have a decent life such as
housing, fresh water, food, health services and physical safety.
Tangible assets that are available to be used in the production
process.
The ratio of dependent young and old people to the population
of working age
An economy where all citizens enjoy a standard of living that
enables them to live a free, healthy and safe life.
An economy where all citizens do not have the resources
available to live a free, healthy and safe life.
A plan of action to achieve economic development, which
takes into account the current situation in a certain country.
An increase in the overall living standard of all the people in a
country.
A sustained increase in the GDP of a country/An increase in
the productive capacity of an economy over time. It is a change
in the real GDP.
The total market value of goods and services produced within
the boundaries of a country within a specific period of time.
ECON GRD 11 L B
KEY CONCEPT
Growth, employment and
redistribution (Gear)
Indigenous knowledge
systems
Infant mortality
Infrastructure
Joint initiative on Priority
Skills acquisition (JIPSA)
National Growth Path
(NGP)
Per capita income
DEFINITION/DESCRIPTION
A strategy to promote economic growth, increase employment
and redistribute income.
A complex set of knowledge, skills and technologies that exist
and have been developed around specific conditions in populations and communities indigenous to a particular geographic
area.
Traditional, local knowledge and technologies that developed
over time around specific conditions by communities living in a
particular geographic area
Death rate during the first year of life
The basic facilities which directly benefit the process of production and distribution in an economy e.g. roads, railways, telecommunication systems, waterways, airways, financial
institutions, electricity, water supply etc.
An initiative to aid the development of urgently needed skills to
facilitate job creation.
Initiatives to stimulate economic growth.
a measure of the amount of money earned per person in a
nation or geographic region/It is calculated by dividing the
country's national income by its population.
Poverty
A state or condition in which a person or community lacks the
financial resources and essentials for a minimum standard of
living/The income level from employment is so low that basic
human needs can't be met.
Reconstruction and
A development policy to improve service delivery to the poor
Development Programme and create an environment for human development
(RDP)
Standard of living
The material well-being of the average person in a given
population. It is typically measured using gross domestic
product (GDP) per capita.
Strategy
A plan of action designed to achieve a particular goal.
Unemployment
Occurs when a person who is actively searching for employment is unable to find work.
A comparison between economic growth and economic development
•
•
Economic growth is a sustained increase in the GDP of a country. It is also refers
to an increase in the productive capacity of an economy over time. It is a change
in the real GDP.
Economic development is an increase in the overall living standard of all people in
a country. It is measured using gross domestic product (GDP) per capita.
Common characteristics of developing countries:
•
Low per capita real income – developing countries suffer from low per capita real
income level, which results in low savings and low investments. It means the average person doesn’t earn enough money to invest or save money. They spend
whatever they make.
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•
Low standard of living in developing countries due to low income that results in
poverty, inadequate housing, poor health, limited education and training, high infant mortality and low life expectancy.
Low levels of productivity due to lack of skills, particularly in areas such as science and technology. Conditions such as poor health, poor nutrition, lack of education and training can also be a cause of low labour productivity.
High population growth and dependency burdens – the population growth rate
in developing countries is high with many people who are unemployed. The few
who are working take care of the unemployed ones.
High levels of unemployment due to very few opportunities which are available
for the large number of unemployed people.
Dependence on the primary sector – the vast majority of people in less developed countries live and work in rural areas. Although agriculture is a dominant
sector in many developing countries, it is characterised by low levels of productivity. Exports in primary sector make up more than the exports of manufactured and
service goods in developing countries.
Deficient infrastructure – some of the areas in developing countries are not accessible due to the poor conditions of the roads and bridges. Inadequate railways,
low gas and electricity production, poor housing and educational and public health
care facilities also work against development.
•
•
•
•
•
The strategies to increase economic development:
•
Entrepreneurship - an increase in the number of businesses in the country which
can create more job opportunities. More businesses from local and abroad should
be attracted. Various incentives and funding of small and medium businesses
should be used to encourage entrepreneurial development.
Community skills development - building community capacity by developing
skills for community which will be able to provide for their own needs without relying too much on the government.
Natural resources - effective use of the natural resources of the country is important.
Human resource - education and training should be used to improve the quality
and quantity of a country’s labour force. Improvement in healthcare and nutrition
can help to improve the quality of the labour force.
Capital - to increase investment in capital goods is essential. Economic development is possible if the local government promotes direct investment. Foreign funding can also be used to finance projects and capital goods.
Technological developments and improvements which affect productivity
positively. An emphasis on science and technology, managing technological
products and resources and strategic planning are important for development.
•
•
•
•
•
South Africa’s endeavours:
Reconstruction and development (RDP)
• The main strategy was to alleviate poverty and address the inequalities and shortfalls in social services by focusing on job creation, welfare, housing, transport,
land reform, healthcare, education, training, water and sanitation.
• Evaluation thus far:
-
Meeting basic needs: government creates an increased demand for goods and
services.
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-
The expanded public works programmes were mostly labour intensive. This
helped alleviate unemployment and poverty slightly.
Some social achievements: building houses, providing clean water,
electrification, land reform, and healthcare.
Real GDP growth erratic since 1994, unemployment in formal sector increased.
Key objectives of poverty reduction and improved service delivery hardly successful
Growth, Employment and Redistribution programme (GEAR)
• The main strategy was to strengthen economic development, redistribute income
and create socio-economic opportunities for the poor.
• Evaluation thus far:
- Mixed outcomes.
- Brought greater financial discipline and macroeconomic stability.
- Real reduction in fiscal deficit (less than 3% in terms of international benchmarks).
- Inflation has dropped mostly to within inflation targets.
- Foreign exchange reserves increased in most regards.
- Failure to create sustainable job opportunities.
- Failure to redistribute wealth more evenly.
The joint initiative on priority skills acquisition (JIPSA)
• It is the skills development arm of ASGISA. Focus is on skills development, especially through the SETAS.
The accelerated and shared growth initiative for South Africa (AsgiSA)
• Its objective is to co-ordinate government initiative to create economic
development:
• The key elements are:
- Halve unemployment and poverty by 2014.
- Accelerate economic growth to an average of 6% between 2010 and 2014.
• Evaluation thus far:
- Growth in infrastructure investment, especially in the public sector.
- Employment growth has lagged behind economic growth – reason real wage
increases are higher than productivity.
- The second economic strategy helped slightly to reduce unemployment through
the Expanded public Works Programme.
- Poor economic growth and high unemployment for the youth.
National Skills Development Strategy (NSDS)
• The Skills Development Act (1998) provides a framework for skills development in
the workplace.
• Skills development has been identified as a key requirement for economic empowerment of the previously disadvantaged.
• The Skills Levy Act (1998) provides for the payment of levies by employers and
the establishment of Sectoral Education and Training to administer the funds of
the scheme and manage the skills development process.
Financing Entrepreneurship Promotion Programmes
• Entrepreneurship promotion programmes exist, which outline how the government
intends to support local entrepreneurs.
• Some local businesses have the potential to solve some socioeconomic problems
in rural areas, but they need financial support.
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•
There are institutions that assist local entrepreneurs such as Isivande Women’s
Fund, National Empowerment Fund, South African Micro-Finance Apex Fund,
Business
Partners Ltd.
The importance of indigenous knowledge systems (IKS):
•
•
•
•
•
•
•
IKS is important for economic development – IKS is important in key areas such
as agriculture, animal husbandry, primary health care, saving, lending, community
development and poverty alleviation.
IKS is relevant for developmental processes – it is important for local communities
in which the bearers for such knowledge live and produce. It must be recognised,
valued, appreciated by those who want to interact with local communities for
development purposes.
IKS serves as a basis for problem-solving strategies for local communities – it
addresses many problems that concern local people such as local pest and weed
problems, indigenous soil fertility practices, and innovative ways in which local
people collect water. Some of these problems cannot be addressed by scientific
research.
IKS is important for both local communities and the global economy – the impact
and sustainability of international practices could be more effective if they adapted
to local conditions and indigenous practices.
IKS is part of the lives of the rural poor – the lives of the rural poor depend on specific skills and knowledge essential for their survival.
Indigenous knowledge systems can make a significant contribution to sustainable
development through conservation and sustainable use of biodiversity. A clear
need to strengthen indigenous knowledge practices and cultures by protecting and
recognising the value of such systems and preventing their loss has emerged.
Indigenous knowledge can help to meet the broader objectives of society, for instance conserving the environment, developing sustainable agriculture and ensuring food security, while its protection encourages the maintenance of traditional
practices and lifestyles.
QUESTION 1:
Section A – Short Questions
: When answering Section A – short question, it is important not to rush but to read the
questions carefully and to make sure you understand what the question is asking. Always remember one alternative is completely wrong, one is nearly correct and one is totally correct. It is easy
to eliminate the completely wrong answer, but if you do not read the question carefully the nearly
correct answer will also appear correct. The answer will NEVER be two options. Only ONE option
is correct. Your answer will immediately be marked incorrect if you write TWO options.
Learners must know their concepts well, as this will assist in a better understanding
of the content in general. Leaners are encouraged to revise these types of questions that
are found in Section A of the paper
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1.1. Various options are provided as possible answers to the following
questions. Choose the answer and write only the letter (A–D) next to the
question number.
1.1.1 The Human Development Index (HDI) measures the level of economic … of all
countries of the world.
A
development
B
growth
C
importance
D
growth
1.1.2 The … is used to measure the standard of living in a country.
A
level of per capita income
B
inflation level
C
balance of payments
D
circular flow
1.1.3 The Millennium Development Goals included …
A
better higher education.
B
reducing child mortality.
C
promoting better skills among youth.
D
lowering interest rates.
1.1.4 The standard of living of a population is best described by the ...
A
per capita income.
B
low economic growth.
C
a decrease in expenditure.
D
secondary education.
1.1.5 The nationwide government intervention plan to create employment for the poor
and vulnerable is called the ...
A
Industrial Policy Action Plan.
B
Affirmative Action.
C
Expanded Public Works Programme.
D
Black Economic Empowerment (BEE).
1.1.6 … measures the economic growth in percentage from one period to another.
A
Real economic growth rate
B
Economic growth rate
C
Inflation rate
D
GDI
1.1.7 The acronym RDP stands for …
A
Rural Development Programme.
B
Road Development Project.
C
Reconstruction and Development Programme.
D
Reconstruction and Development Project.
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1.1.8 This programme was implemented in 1994 to address the socio-economic problems brought about by the policies of the previous government.
A
HDI
B
RDP
C
Jipsa
D
NGP
1.1.9 Purpose built Industrial estates in South-Africa, which are exempted from import
duties known as a/an …
A
SDI
B
IMS
C
IAP
D
IDZ
1.1.10 The most important asset of a country is its … resources.
A
capital
B
human
C
natural
D
financial
1.1.11 Which indicator is used by the World Bank to measure the level of economic
development?
A
life expectancy at birth
B
adult literacy rate
C
infant mortality rate
D
Gross National Income
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 – 1.2.13) in the
ANSWER BOOK.
COLUMN A
1.2.1 Indigenous
knowledge
COLUMN B
A Measures the level of development of countries)
B Include protection, sanitation and water
1.2.2 Population growth
C
Unique practices of locals in a given culture or society
D
A measure of standard of living
E
A trade agreement between a group of emerging
markets
F
A policy aimed to increase the ownership of
agricultural land to black people in the economy
G
The change in the number of people in a country over
time
H
This institution was established in 1983 to promote
economic development in Southern Africa.
I
Measures the level of development of countries
1.2.3 Per capita GDP
1.2.4 Human Development Index
1.2.5 Productivity
1.2.6 Land redistribution
program
1.2.7 DBSA
1.2.8 BRICS
1.2.9 Community service
1.2.10 Poverty
1.2.11 Capital
J A program in which government funding is invested in
infrastructure development and educational skills development
1.2.12 SETA
1.2.13 AsgiSA
K The estimated minimum level of income needed to
secure the necessities of life
L
A vocational skills training organisation in South Africa
M Not wanted for itself but for its ability to help in producing other goods
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronym or examples will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
Returning land to people from whom it was forcibly taken
Income per member of the population of a country
The knowledge that is unique to a given culture or community
A statistic used to rank countries by level of human development in terms of set
criteria
1.3.5 A country with a low level of material well-being
1.3.6 Implies an increase in the standard of living of the entire population
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1.3.7 The health function, to provide basic health services to the community as a whole
1.3.8 Relationship between the quantity of output and quantity of input
1.3.9 The number of children and elderly people to be financially supported by households in a country
1.3.10 Implementing programs whereby current needs are met without endangering resources for future needs
1.3.11 Launched in 2006 to address the country’s chronic unemployment problem and
skill shortages
1.3.12 A program in which government funding is invested in infrastructure development
and education skills development
QUESTION 2:
: When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. These types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
List any TWO ‘development strategies’.
(2 x 1) (2)
List TWO groups of people that are marginalised in South Africa
(2 x 1) (2)
List the TWO aims/purposes of government’s intervention in the economy.
(2 x 1) (2)
Mention any TWO uses of per capita GDP.
(2 x 1) (2).
List any TWO development policies that were implemented in South Africa
since 1994.
(2 x 1) (2)
In what TWO ways can a country ensure the promotion of quality human
resources?
(2 x 1) (2)
State any TWO characteristics of developing countries.
(2 x 1) (2)
Name any TWO of South Africa’s developmental endeavours.
(2 x 1) (2)
QUESTION 3:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
Why do you think the government should spend more on infrastructure
development?
(1 x 2) (2)
What impact does the Expanded Public Works Programme have on your local
community?
(1 x 2) (2)
How can technology accelerate economic development in South Africa?
(1 x 2) (2)
How important is an efficient infrastructure for the economy?
(1 x 2) (2)
How is the standard of living in a country determined?
(1 x 2) (2)
DATA RESPONSE
All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this
document.
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QUESTION 4:
4.1
Study the cartoon and answer the questions that follow
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
What is depicted in the cartoon above?
(1)
What is the age of the economically active population in South Africa?
(1)
What is the greatest threat to labour in South Africa?
(2)
How do nominal wages differ from real wages?
(2)
Why do developing countries have a large supply of unskilled workers?
(2 X 2) (4)
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4.2
Study the information and answer the questions that follow
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
What percentage is the enrolment in secondary education?
What impact does the literacy rate have on wealth?
What has led to the low enrolment in tertiary education?
Explain how lack of education can lead to a low standard of living.
How should higher education inequalities be addressed to improve the
standard of living of South Africa?
4.3
(1)
(1)
(2)
(2)
(4)
Read the extract and answer the questions that follow
4.3.1 Identify ONE previous strategy in the information above that was used to improve
economic growth in South Africa.
(1)
4.3.2 List ONE characteristic of developing countries.
(1)
4.3.3 What is the main aim of the NDP?
(2)
4.3.4 What negative impact will the implementation of the NDP have on taxpayers?
(2)
4.3.5 How successful will the implementation of the NDP be in the South African
economy?
(2 x 2) (4)
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4.4
Read the extract below and answer the questions that follow:
Government’s great plans disappeared
Johannesburg – The implementation of several great plans by the government have
disappeared “like dew in the morning sun” and the NDP 2030 faces the same fate,
the IFP Brigade said at a press briefing.
South Africa has been down the road of grand plans and ideas before, “Inkhatha
Freedom Party Youth Brigade chairman said at the NDP Indaba in Umhlanga, Kwazulu-Natal.
“Since 1994 great plans have been mooted, but their implementation has never seen
the light of day,” he said. He said the GEAR plan was progressive but disappeared
“like dew in the morning sun”. “The same fate befell AsgiSA. In similar fashion, the
youth wage subsidy also walked the plank”
SOURCE: https://www.iol.co.za/news/politics/governments-great-plans-have-disappeared-1766794
4.4.1 Identify the policy in the extract that was implemented in 2006 to address the
country’s chronic problem of unemployment and skills shortage.
(1)
4.4.2 What does the Acronym AsgiSA stand for?
(1)
4.4.3 Briefly describe the term economic development.
(2)
4.4.4 What is the main aim of the NDP?
(2)
4.4.5 How can South Africa realise the main aim in NDP identified above?
(4)
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4.5
Study the extract and answer the questions that follow
4.5.1 Why do female traditional healers implement a strategy for management of
indigenous knowledge systems?
(1)
4.5.2 Name a health-related problem that can be cured by extracts of wild plants.
(1)
4.5.3 Describe the term indigenous knowledge system (IKS).
(2)
4.5.4 Explain the importance of indigenous knowledge systems as part of local
community development.
(2)
4.5.5 Why does the government implement policies to protect and promote indigenous
knowledge systems?
(4)
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
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QUESTION 5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Paragraph type questions – Middle Cognitive
Differentiate between a developing economy and a developed economy. (8)
Differentiate between economic growth and economic development.
(8)
Explain low life expectancy and lack of education as the characteristics of
developing country.
(8)
Discuss the objectives of GEAR.
(8)
Discuss the aims of Small Enterprise Development Agencies (SEDA) and the
National Skills Development Strategy (NSDS) as strategies for development.
(8)
Discuss ‘low levels of productivity’ as one of the characteristics of developing
countries.
(8)
Briefly explain any TWO elements of Indigenous Knowledge Systems.
(8)
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS
REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking, where candidates should be able to apply their knowledge, through logical reasoning and
also have an awareness of their current economic climate. Content (covered by discuss/
examine/ describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be
assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 6
6.1
6.2
6.3
6.4
6.5
6.6
Paragraph type questions – Higher cognitive
Examine the impact of high population growth on a developing economy such
as South Africa.
(8)
Why is South Africa regarded as a developing economy?
(8)
How can investment in social (human) capital improve economic development
in South Africa?
(8)
How does the South African government promote indigenous knowledge
systems?
(8)
Analyse the standard of living and low levels of productivity as characteristics
of developing countries.
(8)
Why are indigenous knowledge systems important for local communities? (8)
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ESSAY STRUCTURE
All section C questions have TWO questions 5 & 6 NOT like in this
document. In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOSTRUCTURE OF ESSAY:
CATION:
Introduction
Max 2
The introduction is a lower-order response.
• A good starting point would be to the main concept related to the
question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically
Max 26
discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/
How/ Suggest/ Construct a graph
Max 10
Conclusion
Any Higher or conclusion include:
Max 2
• A brief summary of what has been discussed without repeating
facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
40
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QUESTION 7
•
•
Critically analyse the following developmental strategies used in support of the
development of countries.
Human resources
Natural resources
Technology
(26 marks)
Why are Indigenous Knowledge Systems (IKS) important for the economic development of a country?
(10 marks)
[40]
QUESTION 8
•
•
Discuss in detail the characteristics of developing countries.
(26)
Explain income inequality with the aid of a graph, making specific reference to SA
in your answer.
(10)
[40]
QUESTION 9
•
•
Discuss characteristics of developing countries.
(26 marks)
How have basic services, such as health and welfare, improved in South Africa?
(10 marks)
[40]
QUESTION 10
•
•
Discuss the methods used to increase economic growth in detail. (26 marks)
How can human and natural resources be used to ensure economic
development?
(10 marks)
[40]
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ECONOMIC PURSUITS
TOPIC 3: MONEY AND BANKING
(WEEK 4 -6)
MIND MAP
Micro
lending
activities
Banking
Money
MONEY &
BANKING
Central
Banking
Bank Failures
&
Consequences
CONCEPTS
KEY CONCEPTS
Fiat currencies
Prime lending rates
Micro-lending
Repo rate
Money associated
instruments
Deflation
Moral Persuasion
Monetary policy
Inflation target
Central Bank
M1
M2
M3
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DESCRIPTION / DEFINITION
A medium of exchange whose value derives entirely from its
official status as a means of payment.
The rate at which banks charges the general public when
money is borrowed by the public.
Is a financial innovation made possible by technology and the
peer to peer economy.
The rate at which commercial banks are charged by reserve
bank when they borrow money.
Credit cards, debit cards and electronic transfers.
The decrease of the purchasing power of money.
The South African Reserve Bank use it to convince banks to
act in a way that is desirable in the current economic climate.
The central banks use of changes in the quantity of money or
the interest rates to stabilise the economy.
3-6% band
An institution that over -sees and regulates the banking system and controls the monetary base.
Coins and bank notes in circulation plus cheque account.
M1 plus short term and medium term deposits.
M2 PLUS LONG TERM DEPOSITS.
ECON GRD 11 L B
KEY CONCEPTS
cash reserve ratio
(crr)
Micro-lenders
Capital markets
SARB
Money market
Foreign exchange
markets / forex
Currency
DESCRIPTION / DEFINITION
that minimum percentage of deposits with the commercial
banks which the commercial banks must keep with the central
bank
The industry that lends small amounts to those who are unable to borrow from normal banks.
Financial institutions involved in long term investments
The body that regulates and supervises the banks
The market for short -term savings and loans
This market include all the foreign exchange dealers, such as
banks
Legal tender in the country of its origin.
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1
MONEY AND BANKING
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions. Choose the answer and write only the letter (A–D) next to the
question number.
1.1.1 Money is not…
A a medium of exchange.
B a measure of value.
C real wealth.
D a standard of future payment.
1.1.2 The total supply of money in the economy is known as…...
A M2
B M3
C M1
D M4
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1.1.3 The … rate is the most important determinant of short-term interest rates.
A bank
B repo
C export
D import
1.1.4 The … makes all the coins on behalf of the central bank.
A South African Reserve Bank
B South African Bank Note Company
C South African Mint Company
D South African Coin Makers
1.1.5 The key cause of inflation is increases in the … of money.
A supply
B demand
C value
D transfer
1.1.6 Which one of the following can NOT be done at an ATM?
A coin deposit
B cash withdrawals
C inter account transfer
D notes deposit
1.1.7 An exchange rate system in which the price of a currency is determined by
demand and supply is called … exchange rate system.
A
B
C
D
free floating
managed
inflationary
fiscal
1.1.8 A … occurs when a bank is unable to meet its obligations to its depositors
or other creditors.
A bank finance
B bad loan
C bank fraud
D bank failure
1.1.9 A reason for bank failure is …
A lower inflation rate.
B upswing in the economy.
C bad management of liquidity.
D increase in interest rates.
1.1.10 The … is a set of mechanism by which a government provides money (cash)
in a country’s economy.
A MPC
B monetary system
C fiscal system
D cash in transit
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1.2
Choose a description from COLUMN B that matches the item in COLUMN
Write only the letter (A-L) next to the question number (1.2.1 – 1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Fiat currencies
1.2.2 Prime lending
rates
1.2.3 Repo rate
1.2.4 Micro-lending
1.2.5 Central Bank
1.2.6 Monetary policy
1.2.7 3-6% band
1.2.8 Moral Persuasion
1.2.9 Money associated instruments
1.2.10 Deflation
COLUMN B
A. Financial innovation made possible by technology
and the peer to peer economy.
B. Money supply and interest rates are some of its instruments.
C. Used by the SARB to convince banks to act in a
way that is desirable in the current economic climate.
D. The rate at which banks charges the general public
when money is borrowed by the public.
E. Notes and coins from a central bank such as the
SARB in South Africa.
F. SARBs inflation target.
G. The rate at which commercial banks are charged
by Reserve Bank when they borrow money.
H An institution that manages a States currency,
money supply and interest rates.
I. The purchasing power of money will decrease.
J. Credit cards and electronic transfers.
K. Coins and bank notes.
L. Assets such as money saved for future use.
HINT: Learners must know their concepts well, as this will assist in a better understanding of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
1.3
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations, acronyms or examples will be accepted.
1.3.1 Money that must be accepted by law as means of payments.
1.3.2 Giving loans to small businesses and low income earners.
1.3.3 The central bank of South Africa.
1.3.4 Measures of central banks to achieve economic objectives.
1.3.5 Bank rates at which banks borrow funds from the Reserve Bank.
1.3.6 Property given as a security for payment of a loan.
1.3.7 A legal proceeding involving a person or business that is unable to repay
outstanding debts.
1.3.8 The most liquid money market instrument.
1.3.9 Used by the SARB to convince banks to act in a way that is desirable in the
current economic climate.
1.3.10 Notes and coins from a central bank, such as the SARB in South Africa.
1.3.11 A type of negotiable instrument known as promissory note, made by a bank,
payable to the bearer on demand.
1.3.12 Legal tender in the country of its origin.
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1.3.13 The industry that lends small amounts to those who are unable to borrow
from normal banks.
1.3.14 The Act that promotes fair and sustainable credit market.
1.3.15 Financial institutions involved in long term investments.
1.3.16 The lowest rate at which a bank will lend money to its best customers.
1.3.17 The body that regulates and supervises the banks.
1.3.18 The market for short -term savings and loans.
1.3.19 The most important function of banks.
1.3.20 This market include all the foreign exchange dealers, such as banks.
SECTION B
QUESTION 2:
:When the question requires you to “list” or “name”, you need not write a
sentence but merely the word or a phrase. This MUST be done in bullet
form. This types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
Answer the following questions:
Name TWO money associated instruments.
List any TWO functions of money.
Give the TWO forms of modern money.
List any TWO examples of credit instruments.
List TWO properties a commodity must have in order to serve as money.
Name TWO aims of monetary policy.
(2)
(2)
(2)
(2)
(2)
(2)
QUESTION 3:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
that their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
3.6
3.7
How do credit cards contribute positively to the economy?
(2)
How is Covid-19 impacting on the financial sector?
(2)
How are short term borrowings made by the government from the central bank
(2)
How effective is high interest as an “inflation fighter”?
(2)
How does the SARB change the money supply?
(2)
How do currency and coin enter the money supply?
(2)
How will an increase in the quantity of money affect prices of goods and
services and the value of money?
(2)
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QUESTION 4
DATA RESPONSE
4.1 Study the picture below and answer the questions that follow:
Source : google images
4.1.1 What is illustrated above that is put in place by SARB?
4.1.2 Name any ONE secondary instrument used as a payment method in
South Africa.
4.1.3 Describe how does inflation affect money as a store of value.
4.1.4 Discuss the aims of monetary policy.
4.2
(1)
(1)
(4)
(4)
Read the article below and answer the questions that follow:
[ALERT] RESERVE BANK CUTS REPO RATE BY 25 BASIS POINTS
The prime lending rate, which is the interest charged by banks to clients, is now at 10%. “The
MPC decided to reduce the repurchase rate by 25 basis points to 6.5% with effect from 29 March
2018. Four members preferred a reduction while three members preferred an unchanged stance.
“The 25 basis point cut had been expected by traders and economists, after a slowdown in consumer price inflation to 4.0% in February meant price growth was well within the central bank's 36% target range.
Lesetja Kganyago says risks to South Africa's inflation outlook have subsided somewhat since
the bank's last monetary policy meeting in January and that the outlook for economic growth is
more positive but still challenging. “The lack of compensation for fiscal drag, weak employment
growth as well as by subdued growth in credit extension to households. While consumption
expenditure is expected to grow at a slightly slower rate in 2018 compared to last year, the trend
over the forecast period is moderately stronger than previously expected, reaching 2.1% in
2020.”The central bank last cut rates in July 2017, highlighting an improving inflation outlook,
but warning of a slowdown in economic growth. Consumer inflation, which the bank uses as a
guide for deciding rates, has remained within the bank's target of 3% to 6% for the past year
and is expected to average 4.9% this year.
Source :Eyewitness News
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4.2.1
4.2.1
4.2.3
4.2.4
What role does Mr Lesetja Kganyago play at the SARB currently?
(1)
What is the current repo rate in South Africa?
(1)
Briefly define the term interest rate.
(2)
How will businesses be affected with the cutting repo rates by a few basis Points?
(2)
4.2.5 Differentiate between the micro-lending industry and village financial services
cooperatives.
(4)
4.3
Study the information below and answer the questions that follow:
4.3.1
4.3.2
4.3.3
4.3.4
Identify the cost responsible for the skyrocketing of small money loans? (1)
Name ONE cost that would remain constant.
(1)
Calculate the total cost of credit for a R500 loan over one month.
(2)
Describe the effect on the cost of the loan if the monthly service fee is removed?
(2)
4.3.5 What impact will this high cost have on small money loans for low income
earners?
2x2(4)
4.4
Study the table below and answer the questions that follows:
SOUTH AFRICAN BANKS THAT HAVE FAILED
Bank
Year of
curatorship
VBS Mutual Bank
2018
African Bank
2014
Saambou Bank
2002
New Republic
Bank
2002
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Reason
Poor management and liquidity
problems
Poor management and liquidity
problems, particularly around
unsecured lending
Poor management and liquidity
problems
Poor management and liquidity
problems
ECON GRD 11 L B
4.4.1
4.4.2
4.4.3
4.4.4
4.5
Name TWO risks that banks face
How does the South Africa Reserve bank deal bank failures?
Who are the victims of bank failure?
Briefly explain medium of exchange and measure of value as
functions of money.
2x2
(2)
(2)
(2)
(4)
Study the cartoon below and answer the questions that follow:
MONETARY POLICY COMMITTEE CUTS REPURCHASE (REPO) RATE
[Adapted from https://images.app.goo.gl]
4.5.1
4.5.2
rates.
4.5.3
4.5.4
Name the central bank in South Africa.
(1)
Mention any other instrument used in monetary policy, besides interest
(1)
Briefly describe the term repurchase rate.
(2)
Briefly explain government’s banker as a function of the central bank.
(2)
4.5.5 How will a cut in interest rates influence consumer spending? 2x2 (4)
4.6
Study the picture below and answer the questions that follow.
MONEY AND BANKING IN SOUTH AFRICA
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4.6.1
4.6.2
4.6.3
4.6.4
Name any TWO major banks in South Africa according to this picture.
Mention a value-added service provided by banks.
Explain why money can retain its value over a long time.
What are the basic principles of credit creation by banks
4.7
Study the information below and answer the questions that follow:
Notes and coins in circulation outside the banking sector:
Demand deposits:
M3 money supply:
Long – term deposits:
(2)
(2)
(2)
(4)
R140 million
R980 million
R3000 million
R800 million
4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
Name ONE financial intuitions which deals with coins.
Use the information above to calculate the value of M1.
Briefly explain the term endogenous money.
Discuss the basic function of a financial intermediary.
Explain what a security is and why it is created.
(1)
(1)
(2)
(2)
(4)
4.8
Study the cartoon below and answer the questions that follow:
SOURCE:GOOGLE IMAGES
4.8.1
4.8.2
4.8.3
4.8.4
4.8.5
Who is crying for help in the cartoon above?
Name one essential function of a bank.
Briefly explain the term cash reserve ratio.
What is an overdraft facility?
Discuss the advantages of e-banking.
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(1)
(1)
(2)
(2)
(4)
ECON GRD 11 L B
QUESTION 5
Paragraph type questions – Middle Cognitive
HINT: All section B questions have TWO 8 marks questions, numbered according to questions not like in this document.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Discuss money as a medium of exchange and a store of value.
2x4 (8)
Discuss the quantity theory of money.
(8)
Discuss the success of the establishment of the Micro Finance Regulatory
council (MFRC).
(8)
Why would there be so many different rates of interest existing at the same time?
(8)
Distinguish between direct and indirect financing.
(8)
Explain why money will not be a good measure to preserve wealth during
periods of inflation.
(8)
Explain with the aid of a diagram the role of banks in the money creation
process.
(8)
Briefly discuss qualities of money.
(8)
QUESTION 6
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking,
where candidates should be able to apply their knowledge, through logical reasoning and also have
an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
Paragraph type questions – Higher cognitive
6.1
6.2
6.3
6.4
6.5
6.6
6.7
How can the government stabilize the value of money in a country?
(8)
Analyse the consequences of bank failures
(8)
Analyse the instruments that the SARB has available to influence the
liquidity deficit of the banking sector.
(8)
Analyse the role of the SARB in maintaining financial stability
(8)
How and why the central bank can influence the money supply?
(8)
How can banks influence economic growth?
(8)
Explain with the aid of a diagram why the SARB may decide to increase the
repo rate. How this increase in the repo rate affect the money market?
(8)
SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
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STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
• A good starting point would be to the main concept related to the
question topic
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body
• Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/
How/ Suggest/ Construct a graph
Conclusion
Any Higher or conclusion include:
• A brief summary of what has been discussed without repeating
facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
QUESTION 7: ECONOMIC PURSUITS
•
•
Discuss the main functions of the SARB.
What causes bank failures?
MARK ALLOCATION:
Max 2
Max 26
Max 10
Max 2
40
40 MARKS – 40 MINUTES
(26)
(10)
[40]
QUESTION 8: ECONOMIC PURSUITS
40 MARKS – 40 MINUTES
•
Discuss the functions of the South African Reserve Bank under the following
headings:
o Government’s banker
(8)
o Bank of issue
(8)
o Bankers bank
(10)
(26)
•
How will the Governor of the Reserve Bank use monetary policy to influence the
quantity of money of a country?
(10)
[40]
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CONTEMPORARY ECONOMIC ISSUES
TOPIC 1: GLOBALISATION
(WEEK 7-8)
GLOBALISATION
Comparison of
the North/South
divide
Consequences of
Globalisation
TERM / CONCEPT
Absolute advantage
African continental Free
Trade Area
Economic integration
Foreign Direct investment
Free Trade
Free Trade Area
G 20
Globalisation
Integration
Internationalisation
Multinational corporations
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Meaning
Causes of
Globalisation
KEY CONCEPTS
BRIEF DESCRIPTION/ DEFINITION
A scenario where a country produces a product more efficiently than others
The newly formed trade block for African countries, to
boost trade between African countries
Trade unification between different states by partial or full
abolishing of customs and tariffs on trade
A form of investment where a foreign company invests in
a business in the form of buildings, machines and equipment
The trading of goods and services between countries with
less red tape
Countries remove all trade barriers among themselves on
goods and services traded.
The group of the first twenty most industrialised countries
A process where the economies of countries become
more connected to one another
A grouping of countries to get more control over the
global economy
The extension of economic activities across national
boundaries.
International businesses that produce goods and services in several countries
ECON GRD 11 L B
TERM / CONCEPT
BRIEF DESCRIPTION/ DEFINITION
Multinational Enterprises Businesses that are producing goods or services in more
than one country.
Quota/s
Limit the quantity of a product that can be imported
Limits the quantity of a product that can be imported into
a country
Regionalisation
A process whereby countries decide to cooperate economically
The World Bank
It works to standardise economic development and measuring of development.
Trade Block
A grouping of countries to get more control over the
global economy
SECTION A
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 Which of the following is not an element of trade?
A. Communication
B. Production
C. Consumption
D. Logistics
1.1.2
FDI moves physical … between countries.
A. Technology
B. Capital
C. Resources
D. Goods
1.1.3 International trade agreements disputes are mediated by the …
A. UN
B. WTO
C. IMF
D. WHO
1.1.4 Because of lower wages developing countries have a/an … advantage in respect
of globalisation.
A. Comparative
B. Relative
C. Absolute
D. Marginal
1.1.5 Which of the following countries is not a member of BRICS?
A. Botswana
B. Russia
C. India
D. China
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1.1.6 For trade to take place, … elements need to come together.
A. 2
B. 3
C. 4
D. 5
1.1.7 In spite of globalisation, poverty in developing countries …
A. has declined.
B. remain unchanged.
C. has increased.
D. has been eradicated.
1.1.8 The trade disputes between rich and poor countries revolve around subsidies on…
A. Tourism
B. Technology
C. Communication
D. Agriculture
1.1.9 Africa is seen as part of the …
A. developed world.
B. North divide.
C. first world.
D. developing world.
1.1.10 This institution is responsible for assisting countries with balance of payment
deficits.
A. ILO
B. World Bank
C. IMF
D. WTO
1.1.11 What is a multinational corporation?
A. It is situated north of the equator
B. It sells products in several countries
C. It forms multilateral agreements
D. It is owned and controlled by the state
1.1.12 Export promotion refers to ...
A
production of goods previously imported.
B
subsidising producers to produce more for exports.
C
removing trade restrictions.
D
making trade rules the same all over the world.
11.13 A country that is a member of the G8 is …
A
South Africa.
B
France.
C
Nigeria.
D
India.
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1.1.14 The institution responsible for supporting countries with balance of payments
losses, is the …
A
ILO.
B
World Bank.
C
SARB.
D
IMF.
1.1.15 Trade liberalisation refers to …
A
the free movement of goods and services.
B
the free movement of people.
C
the establishment of trade barriers between South Africa and the rest of the
world.
D
import and export restrictions.
1.1.16 Increased co-operation between countries results in the formation of …
A
trade blocks.
B
building blocks.
C
banking blocks.
D
business blocks.
1.1.17 The process of interaction among the countries of the world to bring their
economies closer together is called ...
A
globalisation.
B
industrialisation.
C
containerisation.
D
liberation.
(17x 2) (34)
1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-H) next to the question number (1.2.1 – 1.2.6) in the
ANSWER BOOK.
COLUMN A
1.2.1 Capital liberalisation
COLUMN B
A. An organisation that initiated trade liberalisation.
1.2.2 IMF
B. Removal of exchange and investment controls
1.2.3 Internationalisation
C. Trade is an important element.
1.2.4 Globalisation
D. Removal of restrictions such as tariffs and quotas.
1.2.5 GATT
E. Extension of economic activities across national
borders.
F. A country can produce the same output at a lower
resource input than another country.
1.2.6 Absolute advantage
G. Standardise trade, BOP and exchange rates,
international lending and borrowing.
H. A country can produce more output with the same input than another country
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(6 x 1)
HINT: Learners must know their concepts well, as this will assist in a better under-standing of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
1.3
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The extension of economic activities across national boundaries.
1.3.2 Businesses that are producing goods or services in more than one country.
1.3.3 Trade unification between different states by partial or full abolishing of customs
and tariffs on trade.
1.3.4 The group of the first twenty most industrialised countries.
1.3.5 It works to standardise economic development and measuring of development.
1.3.6 Countries remove all trade barriers among themselves on goods and services
traded.
1.3.7 Limits the quantity of a product that can be imported into a country.
1.3.8 International businesses that produce goods and services in several countries
1.3.9 The trading of goods and services between countries with less red tape
1.3.10 A scenario where a country produces a product more efficiently than others
1.3.11 A process where the economies of countries become more connected to one
another
1.3.12 A grouping of countries to get more control over the global economy
1.3.13 A process whereby countries decide to cooperate economically
1.3.14 A grouping of countries to get more control over the global economy
1.3.15 A form of investment where a foreign company invests in a business in the form of
buildings, machines and equipment
1.3.16 Limit the quantity of a product that can be imported
1.3.17 A government imposed trade restriction that limits the number, or monetary value,
of goods that can be imported or exported during a particular time period
1.3.18 The newly formed trade block for African countries, to boost trade between African
countries.
(18 x 1) (18)
SECTION B
QUESTION 2
2.1
State two characteristics of internationalisation.
2.2
Name any TWO member countries of BRICS.
2.3
Name any TWO Multinational Enterprises.
2.4
List any TWO territorial divisions of the world.
2.5
State any TWO key structures of trade.
2.6
Give any TWO elements of globalisation.
2.7
Mention TWO major divisions of the global economy.
2.8
Give any TWO member states of the SADC region.
2.9
List any TWO causes of globalisation.
2.10 List any TWO positive consequences of globalisation.
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(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
ECON GRD 11 L B
QUESTION 3
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure
that their answer addresses the question asked
3.1
3.2
3.3
3.4
What is internationalisation?
Define the term globalisation.
Why is it beneficial for countries to engage in free trade?
What is the purpose of AfCFTA?
(1 x 2)
(1 x 2)
(1 x 2)
(1 x 2)
All section B questions have TWO data interpretation questions – each
total 10 marks. Section B consist of Questions 2-4 not as numbered in
this document.
QUESTION 4
Data response
4.1 Study the cartoon below and answer the questions that follow.
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
What is the message of the cartoon?
(1)
State ONE negative impact of globalisation.
(1)
Define the term globalisation.
(2)
According to the cartoon, why should globalization be stopped?
(2)
What will be the impact of stopping globalization on South African’s economy?
(4)
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4.2
Read the extract below and answer the questions that follow:
INTERNATIONAL TRADE JOURNEY
Your product is already popular in the domestic market, so now you are thinking
about going international. Where do you start? These are the questions one hears
from people starting their international journey. It is common for teams to underestimate the complexity of going international which leads to delays, over spending and
epic fails. It is crucial to select regions for international expansion in some priority
order instead of picking them based on gut feeling.
Source: blog.usejournal.com
4.2.1 What is the above extract about?
(1)
4.2.2 State the first step international businesses take when establishing themselves.
(1)
4.2.3 Describe the term economic integration.
(2)
4.2.4 Briefly explain increased quantities as a characteristic of internationalisation.
(2)
4.2.5 Differentiate between globalisation and internationalisation.
(4)
4.3 Study the picture below and answer the questions that follow.
4.3.1
4.3.2
4.3.3
4.3.4
What is the message of the picture?
Which group of countries cause pollution?
Describe the term global warming.
Why are developing countries more affected by climate change than
industrialised nations?
4.3.5 Explain the impact of the actions of industrialised nations on developing
countries.
4.4
Study the cartoon below and answer the questions that follow
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ECON GRD 11 L B
(1)
(1)
(2)
(2)
(4)
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Name ONE main function of the World Trade Organisation (WTO)
Why is the USA regarded as a first world country?
Briefly describe the term free trade.
Why are trade barriers bad for the economy of a country?
What do countries stand to gain from a free trade policy?
4.5
Study the picture below and answer the questions that follow.
(1)
(1)
(2)
(2)
(4)
4.5.1 What does the above picture represent?
(1)
4.5.2 From the above picture, which part of the globe represent developing countries?
(1)
4.5.3 Briefly describe the term wealth.
(2)
4.5.4 Differentiate between countries in the North and countries in the South in
terms of levels of education.
(2)
4.5.5 What are the positive effects of globalisation on South Africa?
(4)
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4.6
Study the cartoon below and answer the questions that follow:
4.6.1 Explain the economic message portrayed by the cartoon above.
(1)
4.6.2 From the cartoon, name the continent that is in the hands of the short man.(1)
4.6.3 Name TWO institutions established to manage the flow of trade between
countries.
(2)
4.6.4 Explain the effect of globalisation on the developing countries.
(2)
4.6.5 Which factors contributed to the above scenario?
(2 x 2) (4)
4.7
Study the cartoon below and answer the questions that follow.
4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
What is globalisation?
(1)
Does globalisation benefit all countries?
(1)
Briefly describe the concept free trade.
(2)
Discuss any negative impact of free trade according to the cartoon.
(2)
Describe the role of the WTO.
(2 x 2) (4)
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4.8
Study the cartoon below and answer the questions that follow.
4.8.1 Which economic concept can be associated with the phrase ‘The world is round,
we’ll get there’?
(1)
4.8.2 What does the abbreviation WTO stand for?
(1)
4.8.3 Briefly explain the concept free trade.
(2)
4.8.4 Explain the relationship between comparative advantage and free trade. (2)
4.8.5 What do countries stand to gain from a free trade policy?
(4)
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4.9
Study the following and answer the questions that follow
4.9.1 Identify ONE country that forms part of BRICS.
(1)
4.9.2 Has the BRICS agreement resulted in any significant improvements to the SA
economy?
(1)
4.9.3 Briefly describe the term trade block.
(2)
4.9.4 What is an emerging economy?
.
(2)
4.9.5 How can South Africa benefit from trade agreements such as BRICS?
(2x2) (4)
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4.10 Study the cartoon below and answer the questions that follow.
4.10.1 What is the economic message portrayed in the cartoon above?
(1)
4.10.2 From the above cartoon state the other term that can be used to describe
countries in the South?
(1)
4.10.3 Describe the term globalisation.
(2)
4.10.4 Explain the major help countries in the South get from countries in the North?
(2)
4.10.5 Differentiate between developing countries and developed countries using
information in the cartoon above.
(4)
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
QUESTION 5
5.1
Explain the advantages of internationalisation.
(8)
5.2
Briefly discuss the positive effects of globalisation.
(8)
5.3
Discuss the advantages of Multinational enterprises.
(8)
5.4
Briefly discuss any TWO characteristics of globalisation.
(8)
5.5
Briefly explain trade liberalisation and standardisation as causes for
globalisation.
(8)
5.6
Explain changes in employment conditions and changes in culture as
consequences of globalisation.
(8)
5.7
Explain improvement of communication and technology as a cause of
globalisation.
(2 x 4) (8)
5.8
Discuss the positive effects of globalisation.
(8)
5.9
Discuss the disadvantages of globalisation.
(8)
5.10 Tabulate TWO differences to illustrate the North-South divide.
(8)
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TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These
types of questions test critical thinking, where candidates should be able to
apply their knowledge, through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate)
can be assessed as higher-order questions. Answers will not necessarily be
found in textbooks.
QUESTION 6
Paragraph type questions – Higher cognitive
6.1
What would South Africa gain from integrating with other economies?
(8)
6.2
Why would a country prefer foreign direct investment as opposed to portfolio
investment?
(4 x 2) (8)
6.3
How can South Africa benefit from trade agreements such as BRICS?
(8)
6.4
Evaluate the effect of globalisation on the economy of South Africa.
(8)
6.5
Evaluate the effect of the Covid-19 pandemic on globalisation
(8)
6.6
Discuss in detail the AfCFTA.
(8)
QUESTION 7
• Examine in detail the causes of globalisation.
•
(26 marks)
Evaluate the negative impact globalization has on South African economy.
(10 marks)
QUESTION 8
• Compare the characteristics of the North and South divide economies.
(26 marks)
• How has the Covid-19 pandemic negatively impacted on the South African
economy?
(10 marks)
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CONTEMPORARY ECONOMIC ISSUES
TOPIC 2 :ENVIRONMENTAL DETERIORATION
(WEEK 9 -10)
RELATIONSHIP:
ENVIRONMENT &
ECONOMY
Conflict of
different uses of
the natural
environment
The global and
local impact on
South Africa
ENVIRONMENTAL
DETERIORATION
Examine in detail
the state of
environment
Approaches to
sustainability
Protecting the
environment
KEY CONCEPTS:
CONCEPT
Air pollution
Brown Issues
Clean energy
Command and control
(CAC)
Conservation
Deforestation
Ecosystem
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DESCRIPTION /DEFINITION
Occurs when there is an accumulation of substances in the atmosphere in such concentrations that they become part of the
air we breathe. Air pollution can include tobacco smoke, exhaust
fumes and acid rain etc.
Effects on environmental health impacts, such as water usage
and waste collection.
This is energy that is produced through methods that do not release greenhouse gases or any other pollutants, such as electricity or nuclear power.
The direct regulation of an industry or activity through laws that
state what is allowed and what is illegal.
Deals with the sustainable use and management of both renewable and non-renewable resources to ensure that they are available for use for future generations.
Cutting, clearing and removal of rainforest/trees into less bio-diverse ecosystem such as pasture, cropland or plantations/permanent destruction of forests in order to make the land available
for other uses.
A localised group of interdependent organisms together with the
environment that they inhabit and depend on.
ECON GRD 11 L B
CONCEPT
DESCRIPTION /DEFINITION
Environment
Refers to everything around us: land, water, air, plant and animal life. It provides us with the space to live, erect buildings and
produce food.
Environmental
degradation
Environmental subsidies
Exploiting natural resources without destroying the ecological balance of an area
Environmental Sustainability
Erosion
Externalities
Global warming
Green Issues
Green tax/ environmental
tax
Greenhouse Gasses
Kyoto protocol
Land pollution/
environmental pollution
Marketable permits
Noise pollution
Pollution
Preservation
Soil erosion
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Cash granted by the government for activities that reduce environmental damage. For example, recycling of waste, production
of unleaded petrol, development of an equipment to save energy
or to reduce smoke etc.
Means the ability of the environment to survive its use for economic activity
It is a gradual process of movement and transport of the upper
layer of soil (topsoil) by different agents, particularly water, wind
and mass movement causing its deterioration in the long term.
Are the extra costs and benefits that are not captured by the
market transactions. They can either be positive or negative.
The emission of greenhouse gases due to human activity
causes global warming which in turn causes an increase in temperature that then leads to rising sea levels, melting of polar ice
caps, flash floods and desertification.
Climate change affecting the whole world
Effects of future generations, such as water conservation and
less waste generation.
Tax that can be imposed on the output of a good, wherever external environmental costs are generated. Green taxes are
charged on items such as tyres.
A gas that contributes to the greenhouse effect by absorbing infrared radiation. Carbon dioxide is an example of greenhouse
gasses.
It is an international agreement whereby developed countries
pay developing countries for their right to pollute.
Arises from dumping toxic waste products. It includes visible
waste and litter as well as the pollution of the soil itself
Each business is given a license (permit) to emit a share of the
chemical pollutants.
The excessive noise released by factories, motor vehicles, loud
music etc. People who live near airports, train stations or factories can actually be harmed by the noise levels they endure
Pollution is the introduction of waste matter into the environment, both directly and indirectly.
To keep resources that are non-renewable intact e.g. ecological
systems, heritage sites
Refers to the wearing away of a field’s topsoil by natural physical forces of water, wind or through forces associated with farming activities such as tillage.
ECON GRD 11 L B
TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear
correct. The answer will NEVER be two options. Only ONE option is correct. Your
answer will immediately be marked incorrect if you write TWO options.
Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 Carbon dioxide that is emitted during the production of goods and services are
called
A
the greenhouse effect.
B
global warming.
C
biodiversity.
D
carbon emissions.
1.1.2 Achieving significant improvement in the lives of at least 100 million slum dwellers
by 2020 is one of the ... goals.
A
World Summit on Sustainable Development
B
Millennium Development
C
Kyoto Protocol
D
COP 17 conference
1.1.3 Which of the following factors is/are responsible for the depletion of the ozone
layer?
A
Carbon monoxide
B
Ultraviolet rays
C
Carbon dioxide
D
Pollution
1.1.4 What is the degradation of land in dry countries called?
A
Environmental deterioration
B
Soil erosion
C
Deforestation
D
Desertification
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1.1.5 Resources that may become exhausted if they are not managed in a sustainable
manner are known as … resources.
A
natural
B
finite
C
man-made
D
renewable
1.1.6 Environmental degradation can be described as ...
A
letting agricultural runoff cause depletion and killing fish downstream.
B
using solar power at a rapid rate.
C
using oil to make gasoline.
D
recycling.
1.1.7 The National Forest Act aims to...
A
protect and enhance quality air.
B
ensure that local communities share the benefits of forests.
C
set standards for the disposal of waste.
D
promote sustainable management, development and protection of forests.
1.1.8 Carbon dioxide that is emitted during the production of goods and services are
called ...
A
the greenhouse effect.
B
global warming.
C
biodiversity.
D
carbon emissions.
1.1.9 Achieving significant improvement in the lives of at least 100 million slum dwellers
by 2020 is one of the ... goals.
A
World Summit on Sustainable Development
B
Millennium Development
C
Kyoto Protocol
D
COP 17 conference
1.1.10 South Africa is currently experiencing a … crisis due to global warming.
A
vegetation
B
conservation
C
water
D
food
1.1.11 Fossil fuels are an example of …
A
non-renewable resources.
B
renewable resources.
C
recyclable resources.
D
non-recyclable resources.
1.1.12 The international agreement on fighting climate change that was adopted in 1997
is called the …
A
Johannesburg Summit
B
Kyoto protocol
C
Rio summit
D
World Summit on Sustainability and Development
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1.1.13 The expression with regard to the environment that the human “footprint” is too big
means
A
population grows to fast
B
People consume too much
C
There is too much wastage
D
Humans use more than the earth’s capacity to reproduce
1.1.14 Land consumption means …
A
using sand in building materials.
B
using land for establishing of towns.
C
converting roads into farmland.
D
building dams in rivers.
1.1.15 Gas emissions and climate change are connected to …
A. property rights taxes.
B. global warming.
C. positive externalities.
D. Private benefits
1.1.16 The state can play an important role in maintaining environmental sustainability
through its …
A. fiscal policy.
B. urbanisation policy.
C. monetary policy.
D. supply side policy.
1.1.17 The state can play an important role in maintaining environmental sustainability
through …
A. taxation.
B. externalities.
C. tariffs.
D. quotas.
1.1.18 A firm will spend less on pollution reduction equipment because of its small
marginal…
A. private cost.
B. social cost.
C. private benefit.
D. social benefit.
1.1 19 Local capacity building among … people is a crucial aspect of sustaining the
environment.
A. endogenous
B. indigenous
C. exogenous
D. biodiverse
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-P) next to the question number (1.2.1 – 1.2.16) in the
ANSWER BOOK.
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
1.2.7
1.2.8
1.2.9
1.2.10
1.2.11
1.2.12
1.2.13
1.2.14
1.2.15
1.2.16
COLUMN A
Land consumption
Environmental
degradation
Deforestation
Global warming
Private ownership
Greenhouse
Gasses
Overexploitation
Desertification
Kyoto protocol
Natural capital
Erosion
Ecosystem
Environmental
Sustainable
Clean energy
Conservation
Preservation
COLUMN B
A A localised group of interdependent organisms
together with the environment that they depend on
B This causes the temperature of the earth to increase.
C examples include electricity or nuclear power that
does not pollute the atmosphere when used as
opposed to cost of oil
D Ensuring a healthy and a continuation of present
ecological systems so as to be productive in the
present and in the future
E the permanent destruction of woodlands
F To reduce emissions of carbon dioxide
G Conversion of open space or farmland to residential,
commercial, office or establishment of towns
H A resource is used at a rate faster than the rate at
which that resource regenerates
I The wearing away of natural resources
J depletion of resources such as air, soil and water
K Turns productive farmland into non-productive
desert as a result of poor land management
L Gas emissions on climate change
M The stock of assets that our environment provides,
such as soil and water
N It concerns elements of the environment that are
threatened with extinction, e.g. wildlife
O People are for flora and fauna if they are given the
right to own them
P Refers to protecting of nature – wildlife, air water and
earth deposits
HINT: Learners must know their concepts well, as this will assist in a better understanding of the content in general. Leaners are encouraged to revise with these type of questions, that are found in Section A of the paper
1.3
Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations, acronyms or examples will be accepted.
1.3.1 When the flow of residual emissions resulting from human activity exceeds the
natural environment’s capacity to absorb them / The introduction of contaminants into the
environment
1.3.2 Animal or plant that are seriously at risk of extinction
1.3.3 Exploiting natural resources without destroying the ecological balance of an area
1.3.4 A way of using natural resources without destroying the ecological balance of an
area
1.3.5 Cutting down forest to make place for plantation and housing
1.3.6 To manage the environment in such a way that it will be protected from change
1.3.7 Limits the quantity of a product that can be imported into a country
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1.3.8 Refer to a change in average water conditions. Or in the time variation of weather
around longer-term average conditions
1.3.9 The consumption of a resources faster than it can be replenished
1.3.10 A type of land degradation in which a relatively dry land region becomes
increasingly arid, typically losing its bodies of water as well as vegetarian and wildlife
1.3.11 Taxes levied on goods damaging the environment
1.3.12 The ability of the environment to survive its use for economic activity.
1.3.13 It refers to meeting the needs of the present generation without compromising the
needs of future generations
1.3.14 Climate change affecting the whole world
1.3.15 To keep resources that are non-renewable intact, e.g. ecological systems,
heritage sites
1.3.16 Its goal was to create strategies to stop and reverse the effects of environmental
degradation (damage), and to support international efforts to promote sustainable development in all countries
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Name any TWO policies and legislation introduced by the Department of
Environmental Affairs to protect the environment.
(2 x 1) (2)
Name any TWO examples of pollution.
(2 x 1) (2)
Name any TWO examples of consumer waste.
(2 x 1) (2)
List any TWO examples of renewable resources
(2 x 1) (2)
Name any TWO principles for sustainable development.
(2 x 1) (2)
Name any TWO of the millennium development goals.
(2 x 1) (2)
List TWO examples of fossils fuels?
(2 x 1) (2)
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure
that their answer addresses the question asked
QUESTION 3:
3.1
What impact does HIV/Aids have on poverty?
(2)
3.2
How do Green Taxes contribute towards sustainability?
(2)
3.3
Why is it important for us to sustain the environment?
(2)
3.4
How do international protocols help sustainable development?
(2)
3.5
How would the Kyoto Protocol help the environment?
(2)
3.6
How do international protocols help sustainable development?
(2)
3.7
How do Green Taxes contribute towards sustainability?
(2)
3.8
How does granting property rights ensure environmental sustainability?
(2)
3.9
What negative externality can be caused during the process of manufacturing
electricity?
(2)
3.10 How do environmental subsidies ensures environmental sustainability?
(2)
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DATA RESPONSE
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4:
4.1
Study the following and answer the questions that follow
4.1.1
4.1.2
4.1.3
4.1.4
Identify from the above extract any TWO ways of protecting the environment.(2)
Briefly describe the concept ecosystem.
(2)
Explain price policy as a method of protecting the environment.
(2)
Why is it vital for human beings to protect the environment?
(4)
4.2
Study the cartoon below and answer the questions that follow
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4.2.1 Identify TWO environmental issues (problems) that can be derived from the
cartoon.
(2)
4.2.2 Explain the term sustainable economic development.
(2)
4.2.3 Name action steps that households can take to reduce the amount of toxic
material we use.
(2 x 1) (2)
4.2.4 What could the government do to prevent unsustainable use of the environment?
(2 x 2) (4)
4.3
Study the information and answer the questions that follow
4.3.1
4.3.2
4.3.3
4.3.4
Identify any ONE environmental issue (problem) .
(1)
What are brown issues in the environment?
(1)
Briefly explain sustainable economic development.
(2)
Name action steps that households can take to prevent the amount of toxic
material we use.
(2)
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4.3.5 What could the government do to prevent the unsustainable use of the
environment?
4.4
Study the graph below and answer the questions that follow.
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Name ONE factor contributing the most to soil erosion.
(1)
What is green environmental issue?
(1)
Briefly describe the term conservation.
(2)
How can technological innovation be used to protect the environment?(2)
How does agriculture contribute to soil degradation?
(4)
4.5
Read the extract below and answer the questions that follow:
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(4)
4.5.1 Which South African Department attended the UNFCCC?
(1)
4.5.2 How many African countries were represented at the UNFCCC?
(1)
4.5.3 Name TWO problems mentioned in the article, about climate change in
Africa
(2)
4.5.4 Briefly describe the term sustainable economic development.
(2)
4.5.5 What could the government do to prevent the unsustainable use of
the environment?
(2 x 2) (4)
4.6
Read the extract and answer the questions that follow
4.6.1
4.6.2
4.6.3
4.6.4
4.6.5
List any ONE factor that contribute to the loss of biodiversity.
What is the increase of global temperatures called?
What is the main cause of climate change?
Briefly explain brown environmental issues.
How does climate change affect the economic environment?
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(1)
(1)
(2)
(2)
(2 x 2) (4)
ECON GRD 11 L B
4.7
Study the article below and answer the questions that follow:
FISHING QUOTAS “DESIGNED TO SQUEEZE OUT THE POOR”
The quota system implemented by the government appeared to be designed to
keep small fishing companies and poor fishers out, says an action group.
Hlanganani Fishing Business Forum chairperson Mawethu Ndude said: “Firstly,
you have the bona-fide fishermen who failed to get quotas and are now sitting without an income. Then you have the small guys who were given quotas, but the costs
of using those quotas are so high, they cannot make a living out of it.” Co-ordinator
Pedro Garcia said: “some allocations are just too small for people to really make a
living from and many bona-fide fishermen sit on the beach, while people who have
never been fishermen go out and catch.”
But Marine and Coastal Management spokesperson Carol Moses said: “The hard
reality is that our marine resources are dwindling and it is impossible to allocate
rights to all. We are investigating various possible alternative job opportunities for
these communities. We are planning the development of harbours and we are looking at the possibilities of ecotourism.”
[Source: www.iol.co.za]
4.7.1 Why is it necessary for government to impose fishing quotas, according to
the article above?
(1)
4.7.2 Name a solution which government is planning to create alternative
jobs for the communities.
(1)
4.7.3 Explain the quota system implemented by government.
(2)
4.7.4 Discuss a reason why the poor fisherman will not benefit from these quotas.
(2)
4.7.5 How could we prevent our “marine resources from dwindling”?
(2 x 2) (4)
4.8
Read the extract below and answer the questions that follow
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4.8.1 How much did it cost Mpumalanga to neutralise the effects of acid rain? (1)
4.8.2 What is the introduction of waste matter into the environment, both directly and
indirectly?
(1)
4.8.3 Briefly describe the term carbon dioxide emissions.
(2)
4.8.3 List TWO economic consequences of land degradation.
(2)
4.8.4 Distinguish between renewable and non-renewable resources.
(4)
4.9 Study the information below and answer the questions that follow.
4.9.1 Give the name of ONE city in the extract where climate change conferences were
held.
(1)
4.9.2 Identify the international organisastion in the extract above that initiates climate
change conferences.
(1)
4.9.3 Describe how greenhouse gases contribute to global warming.
(2)
4.9.4 How can a green fund help to reduce global warming?
(2)
4.9.5 Why is global warming increasing despite the many international conferences
on climate change?
(2 x 2) (4)
4.10 Study the information below and answer the questions that follow.
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4.10.1 What is the main reason for the poaching of rhinos?
(1)
4.10.2 During which year was rhino poaching at its worst in South Africa?
(1)
4.10.3 Briefly describe the term biodiversity.
(2)
4.10.4 Give ONE example of how awareness of the natural fauna and flora can be
created.
(2)
4.10.5 How will conservation benefit the people living near the rhino habitat? (2 x 2) (4)
All section B questions have TWO 8 marks questions. One is a Middle
order paragraph, the other is a Higher order paragraph
QUESTION 5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Paragraph type questions – Middle Cognitive
Explain basic conservation methods used to protect global natural resources.
(8)
Discuss private property rights and voluntary agreements as approaches to
sustaining the environment.
(8)
In which way do international agreements protect the environment?
(8)
Briefly discuss South Africa’s endeavour in renewable resources.
(8)
Explain FOUR ways to achieve environmental sustainability.
(8)
Give FOUR downstream effects of soil erosion.
(8)
Briefly discuss the granting of property rights as a measure to sustain the
environment.
(8)
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TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions test critical thinking,
where candidates should be able to apply their knowledge, through logical reasoning and also have
an awareness of their current economic climate. Content (covered by discuss/examine/ describe/
analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
QUESTION 6
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
What role can society play in trying to save the environment from global warming?
(8)
How does environmental degradation impact on South Africa’s economy? (8)
Why do you think taking care of forests is important for the economy and the
environment?
(8)
What problems would be experienced in the economy if non-renewable
resources were consumed excessively?
(8)
How can humans positively impact on the environment?
(8)
In which way do international agreements protect the environment?
(8)
Explain how the state can aid preservation of the natural forest?
(8)
How do environmental subsidies ensure environmental sustainability?
(8)
How does environmental degradation lead to poverty?
(8)
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ESSAY STRUCTURE
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION:
STRUCTURE OF ESSAY:
Introduction
The introduction is a lower-order response.
● A good starting point would be to the main concept related to the question topic
● Do not include any part of the question in your introduction.
● Do not repeat any part of the introduction in the body
● Avoid saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Critically discuss/ Evaluate/ Critically evaluate/ Calculate/
Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/ How/
Suggest / Construct a graph
Conclusion
Any Higher or conclusion include:
● A brief summary of what has been discussed without repeating facts
already mentioned in the body
● Any opinion or value judgement on the facts discussed
● Additional support information to strengthen the discussion/analysis
● A contradictory viewpoint with motivation, if required
Recommendations
TOTAL
Max 2
Max 26
Max 10
Max 2
40
QUESTION 7
•
Discuss the various approaches that can be used to sustain the environment.
(26 marks)
• What role can society play in trying to save the environment from global warming?
(10 marks)
[40]
QUESTION 8
• Discuss in detail public sector interventions and public sector control as measure
to ensure sustainable development.
(26 marks)
• How did globalisation negatively affect South Africa?
(10 marks)
[40]
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