Grd 11 Lesson Activities - Hoerskool Birchleigh



314325top00GAUTENG DEPARTMENT OF EDUCATIONINFORMAL ACTIVITIES FOR TERM 2 - 2020GRADE 11SUBJECT: ECONOMICS LEARNER ACTIVITIES(Page 1 of 48 )TABLE OF CONTENTSSESSIONTOPICPAGE1Microeconomics: RELATIONSHIP BETWEEN MARKETS8-192Microeconomics: EFFECTS OF COST AND REVENUES20-263Microeconomics:PRICE ELASTICITY27-354Economics Pursuits:ECONOMIC GROWTH AND DEVELOPMENT36 - 47MAIN TOPIC: MICROECONOMICSTOPICCONTENTCONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES5Relationship between markets6Effects of cost & revenueAnalysis of the relationships between markets - illuminate them with the aid of graphsRelative pricesDemand and supply relationships-substitutes-complimentsRelationships between product and factor marketsExplain and illustrate by means of graphs the effects of cost and revenue on prices and the levels of production.Objectives of businessesSMARTSpecificMeasurableAcceptableRealisticTime specificDifferent objectivesSurvivalProfit maximizingRevenue maximizingSales maximizingShort-run costs:total, average and marginalcost schedulescurves (detailed – average cost/marginal cost)Long-run costs- (detailed – economies /diseconomies of scale)-revenue calculations-changes in revenue-profits and lossesNote: Application of revenue and costs analysis should include production and the pricing of factors.Market structure – perfect competition, monopoly competition, monopolistic competition, oligopoly competition.(Educators must teach learners the correct shapes in Gr11)Deriving demand/supply curvesMR/MC relationsShapes of curves (MR/MC/ATC)Types of profits briefly(Relate: AR against AC)Deriving the monopoly curveMonopolistic: Detailed discussion Oligopoly: Detailed discussion(include Kinked-demand curve)(Detailed discussion of non-price competition)Detailed discussion of all characteristics/market structures).Briefly explain relative pricesDiscuss the demand and supply relationshipswith the aid of graphs in detail (substitutes and compliments)Detailed discussion of the relationships between product and factor marketsDetailed discussion of the objectives of a business. Use the SMART principleDistinguish between the different types of objectives in businessExplain the short-run cost of a business. Use cost diagrams and cost graphs in the explanationExplain the long-run cost of a business. Use cost diagrams and cost graphs in the explanationExplain the cost/revenue formula in detailEconomies/diseconomies of scale – detailed(Detailed – MR/MC and TR/TC methods)Discuss in detail the different equilibriums in the short run. Using graphs in your discussion (See the Gr.12 curriculum)Compare and contrast the FOUR broad types of market structures (perfect competition, monopolistic competition, oligopoly and monopoly) in detail in terms of the following.Number of businessesNature of productEntrance Control over pricesInformationExamplesDemand curveEconomic profit/lossDecision-makingCollusionProductive / technical efficiency Allocative efficiencyDiscuss the monopoly in detail ? Briefly describe the concept - Emphasise and highlight good practical examples of businesses in this market ? Examine the characteristics in detail ? Distinguish between natural and artificial monopolies ? Examine the oligopoly in detail ? Briefly describe the concept - Emphasise and highlight good practical examples of businesses in this market ? Examine the characteristics of the oligopoly ? Briefly discuss non-price competition ? Briefly discuss collusion (relate to current examples of collusive behaviour) - Distinguish between overt collusion (cartels) and tacit collusion (price leadership) ? Broad outline of prices and production levels ? Broad outline of the rationale of the kinked demand curve ? Use the graph and briefly explain why oligopolists are reluctant to compete on prices. 7Price elasticityExplanation of price elasticity’s and calculating their values. Use graphs in presentation for illustration.Marginal utilityPrice elasticity of demand (PED) - Definition - Formula - Types of PED - Factors determining PEDPrice elasticity of supply (PES) - Definition - Formula - Types/degrees of PES - Factors determining PESIncome elasticity of demand (IED) - Definition - Formula - Types/degrees of IEDCross elasticity of demand (CED) - Definition - Formula - Types/degrees of CEDDiscuss Marginal Utility under the following: DescriptionTotal and marginal utilityLaw of diminishing marginal utility(Use tables and graphs in explanation) Discuss in detail the price elasticity of demand with the aid of graphs. (PED) Discuss in detail the price elasticity of supply with the aid of graphs. (PES)Broad overview of income elasticity of demand (IED) is required(Discuss the formula and laws with examples)Broad overview of cross elasticity of demand (CED)is required(Discuss the formula and laws with examples)MAIN TOPIC: ECONOMIC PURSUITSTOPICCONTENTCONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES8Economic growthWealth creation process and patterns of distributionWealth creation processDefinition of wealthDifference between wealth and incomeThe sources of wealthMethods to create wealth (Focus on the wealth creation through saving) Distribution-Income distribution-Wealth distribution-How much inequality? The uses of the Gini Coefficient and the Lorenz Curve Redistribution methods International: Affirmative action in South Africa:Broad based black economic empowerment Act. (BBBEE)Land restitution and land redistributionProperty subsidiesEconomic growth-Meaning and calculationImportance-Methods-Constraints on growth-South Africa’s recent growth experienceStandard of livingDefinitionPopulation sizePer Capita incomeBriefly describe and explain the relevant conceptsDifferentiate between wealth and incomeBriefly explain the different sources of wealthExplain the methods to create wealth through savingsBriefly describe and explain the relevant conceptsBriefly explain income distributionBriefly explain wealth distributionExplain the use of the Gini Coefficient to measure income inequalitiesExplain the use of the Lorenz curveUse the Lorenz-curve and explain the unequal distribution of income in South Africa Discuss in detail the different methods uses to redistribute income and wealthTaxationSocial security programmesMinimum wageRedress policies Evaluate the SA government’s effort to redress economic inequalityBriefly describe and explain the relevant concepts Discuss Economic growth(Explain the difference – nominal GDP and real GDP) Explain the importance of economic growth figuresBriefly describe and explain the relevant conceptsBriefly discuss the standard of livingAnalyse the use of the per capita income as economic indicator(Discuss the methods used to increase economic growth in detail) (Sources: Enjoy – Pg. 188/Via Pg. 146)TOPIC 1:MICROECONOMICS: RELATIOSHIP BEWTEEN MARKETSSECTION A: TYPICAL EXAM QUESTIONSDYNAMICS OF MARKETSQUESTION 1: Section A – Short QuestionsHINT: 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. When one decision is made, the next best alternative not selected is called …Aeconomic resources. B opportunity cost. C scarcity.D.need1.1.2All 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. Dmiddle prices to lower output. 1.1.3In imperfect markets, fewer goods are produced at higher prices because A there is constant allocation of resources.B there is effective resource allocationC there is ineffective resource allocation.D there are no legal restrictions1.1.4Tennis balls and tennis racquets are ... products A substituteB heterogeneous C homogeneousD complimentary1.1.5 What would be the economic profit if you had revenue of R10 000, explicit costs of R6 000 and implicit costs of R2 500? A10 000B1 500C 500D15?0001.1.6The price that is quoted for a good on the market and give signals to the buyers is called … price. AabsoluteB relativeC realDconstant1.1.7Firms that determine their own prices are called price.AtakersBmakersCnegotiatorsDsearchers1.1.8 If ‘A’ and ‘B’ are substitute goods, and the price of ‘B’ rises, demand for ‘A.’AdecreaseBremains the sameC remains unstableD increases 1.1.9 The following are examples of firms in oligopoly:A MTN, Absa, EngenB NIKE, McDonald’s, BMWC KCF, Samsung, Romans PizzaD Shoprite, Checkers, Pick n Pay1.2 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 –1.2.12) in the ANSWER BOOK.COLUMN ACOLUMN B1.2.1 Relative pricesAAble to influence the market price through changing the quantity it supplies to the market.1.2.2Inferior goodsBBarriers to enter the market.1.2.3Product marketCMaking as much profit as possible.1.2.4Price makerDPeriod long enough to change theInputs.1.2.5 PatentEFew large sellers dominating the Market.1.2.6 Business objectiveFbarriers protect them from competition by other businesses.1.2.7Long termGgoods offered for sale at a given price.1.2.8SupplyHLegal barrier to entry.1.2.9MonopoliesIIncrease in income leads to smaller quantities demanded of these goods.1.2.10 OligopolyJFacilitates 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.1.2.11 LicenceKComparison between prices of goods.1.2.12Factor marketLGoods and services are traded.1.3Provide 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.1.3.1The price of a good or service, in terms of another good or service 1.3.2Many buyers and sellers selling differentiated products.1.3.3A period whereby only one factor of production can be varied. 1.3.4Minimum earnings that will prevent an entrepreneur from employing its factors of production elsewhere.1.3.5The marketplace in which final goods or services are offered for purchase by consumers, businesses, and the public sector1.3.6An increase in income causes a decrease in demand for this good.1.3.7Demand curve for an oligopoly.1.3.8When firms do branding, advertising, product differentiation, extend shopping hours.1.3.9The 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 promotionSECTION BQUESTION 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 4.1.12.1Name any TWO monopoly industries in South Africa.(2 x 1) (2)2.2List any TWO examples of complementary goods.(2 x 1) (2)2.3.Name any TWO examples of monopolistic markets.(2 x 1) (2)2.4List any TWO kinds of profit.(2 x 1) (2)2.5Name the factors that can cause a shift of the demand curve.(2x1)(2)QUESTION 3:HINT: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.23.1What would encourage a producer to continue increasing its production?(1x2)(2)3.2How does an increase in demand affect the price of a good/service?(1x2)(2)3.3Why is it important for businesses to set goals? (1x2)(2)3.4What makes it possible for an individual producer in perfect competition to make an economic profit in the long run?(1x2)(2)3.5How is non-price competition an advantage for a perfect competitor?(1x2)(2)3.6Why is the demand curve for a perfect competitor horizontal?(1x2)(2)3.7 Why is it impossible for a monopoly to collude? (1x2)(2)3.8 Why is the demand curve of a monopolist sloping downwards?(1x2)(2)3.9What is the implication of the law of supply.(1x2)(2)DATA RESPONSEHINT: 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 documentQUESTION 4:4.1.Study the extract below and answer the following questions: THREE MONOPOLIES THAT SOUTH AFRICA SHOULD ENDEntities 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.AviationEnergy SupplyRailwaysTHREE MONOPOLIES THAT SOUTH AFRICA SHOULD ENDEntities 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.AviationEnergy SupplyRailways4.1.1Identify ONE of the three state monopolies implied in the extract(1)4.1.2How are monopolies protected?(1)4.1.3Describe the term monopoly.(2)4.1.4Why do you think South Africa should end the monopolies mentioned(2)in the above extract?4.1.5Explain the disadvantages of the monopolies(4)4.2Study the graph below and answer the questions that follow. 1104900135255PRICEEEDMARKET FOR PETROLS1SE2P1PES1DSQ1QQUANTITY00PRICEEEDMARKET FOR PETROLS1SE2P1PES1DSQ1QQUANTITY4.2.1What is depicted by the diagram above? (1)4.2.2What is the impact on the price and quantity of the shift in supply from SS to S1S1? (1)4.2.3Explain the phrase inverse relationship.(2)4.2.4What may be the cause of a shift in supply from SS to S1S1?(2)4.2.5Draw the graph of the complement product (petrol) and indicate whatthe reaction would be(4)4.3Study the extract below and answer the questions that follow:OLIGOPOLIESA 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 long- term 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]OLIGOPOLIESA 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 long- term 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]4.3.1From the extract, list any ONE features of an oligopoly(1)4.3.2What other economic term describes the nature of the product sold by oligopolies?(1)4.3.3 Explain the term entry barrier(2)4.3.4 Why do firms collude with one another?(2)4.3.5How does branding assist a company operating in an oligopoly market Structure.(4)4.4Study the graph below and answer the questions that follow. MCPriceATCPeMR / AR0QuantityMCPriceATCPeMR / AR0Quantity4.4.1 Which market structure is depicted above?(1)4.4.2 What type of profit is indicated in the above graph?(1)4.4.3 Briefly explain point ‘e’ on the graph.(2)4.4.4 Explain the slope of the marginal cost curve.(2)4.4.5 Why are MR and AR equal in the graph?(4)4.5Study the graph below and answer the questions that follow: 4.5.1 What does the shaded area in the graph represent?(1)4.5.2 Which point on the graph illustrates profit maximisation?(1)4.5.3 Briefly describe the term monopoly.(2)4.5.4 Explain entry as a feature of a monopoly.(2)4.5.5 Use the formation from the graph, calculate the profit or loss.Show ALL calculations.(4)4.6Study the scenario below and answer questions that follow:AIRPORTS COMPANY SOUTH AFRICA (ACSA)ACSA talks a lot about customer focused services, but its actions demonstrate its contempt for its customers. One needs to look no further than the line Industry to see the benefits of introducing competition into the market. Not everybody may like low cost carriers like Kulula and 1time, but they give people the option and together with price comparison sites like southafricato, have driven airlines down dramatically. Competition has transformed the airline industry, yet a regulated monopoly continues to deliver a service, endless waits for baggage, high levels of theft, airport security lapses.[Source ]4.6.1What should be the main focus of ACSA?(1)4.6.2Identify ONE of the South African Airways competitors.(1)4.6.3Briefly explain the term competition(2)4.6.4How did the introduction of competition benefit the airline?(2)4.6.5Would you describe the taxi industry in South Africa as a monopoly? Explain.(4)HINT: All section B questions have TWO 8 marks questions, numbered according to questions not like in this document.QUESTION 5Paragraph type questions – Middle Cognitive5.1Differentiate between product market and factor market.(2x4)(8)5.2Examine the implication of ‘non price competition’ in oligopolies(2x4)(8)5.3Briefly discuss nature of the product and price control as characteristics ofmonopolistic competition.(2x4)(8)5.4Discuss barriers to entry and collusion as some of the determinants of market structures.(2x4)(8)5.5Briefly explain the characteristics of an oligopoly.(2x4)(8)5.6Explain how the demand for a good is affected by the prices of its related goods. Give examples.(2x4)(8)5.7Briefly discuss the SMART principle in designing the objectives of business.(2x4)(8)5.8Briefly discuss nature of the product and entry as characteristics of a perfect markets..(2x4)(8)5.9What reasons would you give for the reaction of consumers to price changes?(2x4)(8)5.10With the aid of graphs, explain how an increase in demand of a product affects the factor market.(2x4)(8)5.11Use a well-labeled graph to explain how the demand curve of milk would respond when the price of coffee decreases.(2x4)(8)5.12Distinguish between natural and artificial monopolies.(2x4)(8)5.13Discuss competition and transport and communication as characteristics of perfect markets.(2x4)(8)5.14Discuss non-price methods to increase market share.(2x4)(8)5.15Examine the disadvantages of a monopoly as a market structure.(2x4)(8)5.16Explain interdependence of firms and non-price competition as characteristics of an oligopoly5.17With 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.(2X4)(8)5.18With the aid of a diagram, explain the relationship between average and marginal revenue when price is constant at all levels of output.(2X4)(8)5.19With the aid of graphs explain the demand curve type of profit and profit maximizing points of the oligopolist and the monopolistic firm.(2X4)(8)QUESTION 6Paragraph type questions – Higher cognitive6.1How can changes in the product market effect the factor market?(4x2)(8)6.2 Why are relative prices important in the economy?(4 x 2)(8) SECTION CHINT: 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 STRUCTUREHINT: 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: STRUCTURE OF ESSAY:MARK ALLOCATION:IntroductionThe introduction is a lower-order response.A good starting point would be to the main concept related to the question topicDo not include any part of the question in your introduction.Do not repeat any part of the introduction in the bodyAvoid saying in the introduction what you are going to discuss in the bodyMax 2Body:Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ EvaluateAdditional part: Give own opinion/ Critically discuss/ Evaluate/ Critically evaluate/ Draw a graph and explain/ / Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/ How/ SuggestMax 26Max 10ConclusionAny Higher or conclusion include:A brief summary of what has been discussed without repeating facts already mentioned in the bodyAny opinion or value judgement on the facts discussedAdditional support information to strengthen the discussion/analysisA contradictory viewpoint with motivation, if required RecommendationsMax 2TOTAL40[40]QUESTION 7(MARKET STRUCTURES) 40 MARKSDiscuss 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 MARKSDiscuss in detail the characteristics of a perfect market. (26)Briefly highlight how the perfect market differs from that of a monopolistic market. (10)A maximum of 8 marks allocated for headings/sub-headings and examples)QUESTION 9RELATIONSHIP BETWEEN MARKETSWith the aid of clearly labelled graphs and using typical examples of substitute goods in both production and consumption, discuss demand and supply relationships. (26)Analyse the disadvantages the monopolies possess. (10)QUESTION 10Explain 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 11(RELATIONSHIP BETWEEN PRODUCT AND FACTOR MARKET) 40 MARKSDiscuss in detail the product and factor market and show the interdependence of these two markets. (26)Why is the perfect competitor a price taker? Illustrate your answer with a graph. (10)A maximum of 8 marks allocated for headings/sub-headings and examples)QUESTION 12(MARKET STRUCTURES) 40 MARKSCompare in detail features of a monopoly with those of monopolistic competition (include examples in your discussion). ( 26)Why would government support or licence monopolies? (10)A maximum of 8 marks allocated for headings/sub-headings and examples) QUESTION 13(MARKET STRUCTURES) 40 MARKSDiscuss in detail the characteristics of a perfect market (26)Examine the positive impact of competition on markets. (10)QUESTION 14RELATIONSHIP BETWEEN MARKETSDiscuss the FOUR broad types of market structures.(26Determine which market structure KFC operates in and give a reason for your answer. Draw a graph that shows economic profit for KFC. (10)QUESTION 15Discuss in detail the characteristics of an oligopoly. (26 marks)Use a graph and explain why oligopolists are reluctant to compete on prices. (10 marks)TOPIC 2:MICROECONOMICS: EFFECTS OF COSTS AND REVENUESSECTION A: TYPICAL EXAM QUESTIONSDYNAMICS OF MARKETSQUESTION 1: Section A – Short QuestionsHINT: 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.1.1Various 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. 1.1.1Average variable costs is calculated by Avariable cost divided by the number of units produced.Bfixed cost divided by the units produced.Cfixed cost less variable cost.Dtotal cost plus fixed cost1.1.2 The costs that have already been incurred and cannot be recovered are called … costs.AsunkBimplicitCfixedDvariable1.1.3A firm is said to be in its … when it can increase its output by using more variable factors, but not increasing its fixed factors.Amedium-runBlong-runCshort-runDfixed run1.1.4 Opportunity cost is an example of … costAexplicitBsunkCvariableDimplicit1.1.5…….is the additional satisfaction a consumer gains from consuming one more unitof a good or serviceATotal utilityBMarginal utilityCDiminishing marginal utilityDNegative utility1.1.6A stage in the long run average cost curve (LARC) where production neither increases nor decreases is known as … Aeconomies of scale. Bdiseconomies of scale. Cconstant returns to scale. Dflexible returns to scale1.1.7The extra cost of producing an additional unit is referred to as … Aaverage variable cost. Bvariable cost. C average fixed costDmarginal cost 1.1.8When one decision is made, the next best alternative not selected is called …Aeconomic resourcesBWantCscarcityDopportunity cost1.1.9A perfect competitor will make economic loss when its Average Costs (AC) are higher than its Average Revenue (AR), or when total cost exceeds total revenueAAverage Costs are higher than its Average RevenueBAverage Revenue is higher than its Average CostCAverage Cost equals its Average RevenueDFixed Cost equals to its Variable Cost1.1.10To determine…… we look at MR and MC A profit maximising output B normal profit C economic lossD.economic profit1.2 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 –1.2.12) in the ANSWER BOOK.COLUMN ACOLUMN B1.2.1LossAOccurs when an increase in all inputs leads to a less than proportional increase in output.1.2.2Explicit costsBAverage fixed costs are found by dividing total fixed costs by output.1.2.3SpecificCactual expenditure by a firm on purchase of a factor input1.2.4The law of supplyDoccurs when a business has costs that exceed revenue1.2.5AFCEstates that, if all other factors remain equal, the higher the price of a good, the more people will supply that good.1.2.6Diminishing marginal utilityFloss minimising point / profit maximising point.1.2.7MC = MRGA criteria of the most effective business objective.1.2.8Economies of scaleHthe cost advantages due to the larger sizeof production.1.2.9TVCIbuffet-style restaurants entice you with "all you can eat," all the while because they understand this law.1.2.10Total RevenueJthe amount of income generated from selling units of a good or services.1.2.11External economies of scale.KCurve that slopes up at an accelerating rate, reflecting the law of diminishing marginal returns.1.2.12 Decreasing returns of scaleLthe benefits and costs associated with the expansion of a whole industry and result from external factors over which a single firm has little or no control.1.3Provide 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.1.3.1Occurs when the cost per unit decreases while quantities produced increase. 1.3.2The value of the best next alternative that is given up.1.3.3The aggregate level of satisfaction or fulfillment that a consumer receives through the consumption of a specific good or service.1.3.4A change in behavior that buyers and sellers have in response to a price change for a good or service.1.3.5The 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. 1.3.6A law of economics stating that as a person increases consumption of a product, while keeping consumption of other products constant, there is a decline in the marginal utility that person derives from consuming each additional unit of that product.1.3.7Are considered opportunity costs and are normally the company's own resources.1.3.8The difference between the revenue and the costs of the business.1.3.9The period that is so short that some of the factors of production and other inputs will remain fixed and cannot be changed. 1.3.10The difference between two total products as a result of employing one extra worker.1.3.11The point where profit is at its maximum for any firm level and it is where MC = MR SECTION BQUESTION 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 4.1.12.1List TWO examples of fixed costs (2x1)(2)2.2Name any TWO features of utility.(2x2)(2)2.3.List TWO characteristics of the most effective business objectives(2x1)(2)2.4Name TWO examples of sunk costs(2x1)(2)2.5List any TWO ways of measuring revenue(2x1)(2)2.6Name any TWO examples of explicit costs(2x1)(2)2.7Name any TWO features of utility.(2x1)(2)QUESTION 3:HINT: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.23.1Why does the average fixed-cost curve slope downwards from left to right? (1 x 2)(2)3.2What should the business look at when deciding on output?(1 x 2)(2)3.3Why do external diseconomies exist?(2x1)(23.4What should a business look at in order to make decisions on shutting down?(1 x 2)(2)3.5Why are MC curves significant for a firm?(1 x 2)(2)3.6Why do productively efficient firms in a competitive market make use of Cost Curves?(1 x 2)(2)3.7What is the effect of economic profit in a firm?(1 x 2)(2)3.8How does scarcity impact on total utility?(1 x 2)(2)DATA RESPONSEHINT: 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 documentQUESTION 4:4.1Study the graph below and answer the questions that follow:4.1.1What does the abbreviation TVC stand for?(1)4.1.2Why is the TFC curve horizontal?(1)4.1.3Give the formula for total cost as seen in the graph above.(2)4.1.4Explain the term short term in terms of fixed and variable inputs.(2)4.1.5What does the marginal cost of a business entail?(4)4.2Study the table below and answer the following questions:QUANTITYPRICETOTAL REVENUETOTAL COSTTOTAL PROFIT/LOSS090 000060 000-60 000190 00090 000110 000-20 000290 000180 000160 00030 000390 000270 000200 00070 000490 000360 000250 000110 000590 000450 000310 000140 000690 000540 000380 000160 000790 000630 000460 000170 000890 000720 000550 000170 000990 000810 000650 000160 0001090 000900 000760 000140 0004.2.1 Identify, from the table, the quantity at which profits are maximised.(1)4.2.2 For which market structure is the above data applicable?(1)4.2.3 Briefly describe the term profit.(2)4.2.4 What does total cost comprise of?(2)4.2.5 Use the information from the data and draw a demand curve.(4)4.3Study the table below and answer the questions that follow.OUTPUTTCTFCTVCAVCMC0202000-125205C5228A84333020103,324B2016464.3.1What is the value of and C.?(1)4.3.2Give any ONE example of a fixed cost.(1)4.3.3Briefly explain the term Marginal Cost(2)4.3.4Why do variable costs change with output?(2)4.3.5Describe the relationship between average total cost and economies of scale.(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 Cognitive5.1.Distinguish between costs in the short-run and costs in the long run.(2x4)(8)5.2.With the aid of a diagram, explain the relationship between average and marginal revenue when price is constant at all levels of output.(2x4)(8)5.3Distinguish between fixed factors and variable factors.(2x4)(8)5.4Differentiate between the economies and diseconomies of scale.(2x4)(8)5.5With the aid of a graph explain maximum profits in the short run.(2x4)(8)5.6With the aid of a graph, explain the process of determining the profit maximizing level of output using unit cost and revenue functions.(2x4)(8)5.7With the aid of a graph describe the relationship between AC, MC and AVC.(2x4)(8)QUESTION 6Paragraph type questions – Higher cognitive6.1How can producers benefit by producing at a level that allows them to experience economies of scale?(4 x 2)(8)6.2 Evaluate how a comparative advantage in manufacturing fruit juices benefits South Africa.(4 x 2)(8)6.3Why are relative prices important in the economy?(4 x 2)(8)TOPIC 3:MICROECONOMICS: PRICE ELASTICITIESSECTION A: TYPICAL EXAM QUESTIONSDYNAMICS OF MARKETSQUESTION 1: Section A – Short QuestionsHINT: 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.1.1Various options are provided as possible answers to the following quetions.Choose the answer and write only the letter (A–D) next to the question number. 1.1.1A change in the quantity requested as a result of a change in income is referred to as ………..elasticity.ApriceBincomeCofferDsupply 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.1.1.3Total utility can be defined as………..A difference in measurements of utilityB satisfaction gained from consuming the last unitC 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 …AperfectlyBelasticCinelasticDunitary elastic1.1.5 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 changesA inelasticB elasticCelasticityDunitary elastic1.1.6The income elasticity of demand for an inferior good, for example paraffin, will be…A less than 0B equal to 1C greater than 1Dless than 11.2 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 ACOLUMN B1.2.1Income elasticity of demand.AWhen the proportionate change produced in demand is greater than the proportionate change in price of a product.1.2.22Negativemarginal utility.BThe 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.1.2.3Relative elastic demand.CWith other conditions remaining the same, other things being equal.1.2.4The law of demand.DThe solution to the consumer's problem, which entails decisions about how much the consumer will consume of a number of goods and services.1.2.5Marginal costEWhen the consumption of an additional item decreases the total utility.1.2.6ElasticFStates, 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.1.2.7InferiorGIs 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.1.2.8Consumer equilib-riumHAn increase in income reduces demand for the good.1.2.9 ValueIThe power that goods or services have to command other goods or services in exchange..1.2.10Ceteris paribusJMeasures the responsiveness of demandto a change in income.1.3Provide 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.1.3.1The relationship between the change in the price of one product and the quantity demanded of another item. 1.3.2The price of a good or service, in terms of another good or service 1.3.3The total satisfaction gained from consuming a product. 1.3.4The cost advantages due to the larger size of production. 1.3.5When there is no change produced in the demand of a product with change in its price1.3.6An increase in income without a change in quantity demanded.1.3.7Change in behavior that buyers have in response to a price change for a good or service.1.3.8The power that goods or services have to command other goods or services in exchange.1.3.9This 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.1.3.10A good whose demand rises as income rises is called 1.3.11The 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.SECTION BQUESTION 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 4.1.12.1List any TWO ways a firm can increase its scale of operations. (2x1) (2)2.2.Name TWO determinants of the price elasticity of demand. (2x1) (2)2.3State any TWO degrees of price elasticity of supply. (2x1) (2)QUESTION 3:HINT: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.23.1How does scarcity impact on total utility? (1 x 2)(2)3.2Why is it important for businesses to evaluate price elasticity of demand?(1 x 2)(2)3.3What effect does price elastic demand have on a producer should the price of a product increase?(2x1)(2)3.4Why are productively efficient firms make use of cost curves in perfectly competitive market? (2x1)(2)3.5Why is the cross elasticity of demand important? (2x1)(2)3.6Why is the quantity demanded of habit-forming products, price inelastic?(2x1)(2)3.7How does durability affect elasticity of demand? (2x1)(2)DATA RESPONSEHINT: 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 documentQUESTION 4:4.1. Study the cartoon below and answer the questions that follow.4.1.1Identify the phenomenon depicted by the cartoon.(1)4.1.2Name ONE example of normal goods.(1)4.1.3Explain the term perfectly inelastic demand.(2)4.1.4A product has a price elasticity of 1, 58. What kind of elasticityof demand does it represent? Motivate your answer.(2)4.1.5Why is the elasticity of demand important to producers?(4)4.2Study the table below and answer the questions that follow.4.2.1 What type of cross elasticity is depicted in the above table?(1)4.2.2 Give ONE example of goods for cross elasticity of demand above.(1)4.2.3 Briefly describe the term cross elasticity of demand.(2)4.2.4 Explain cross elasticity of demand for unrelated goods.(2)4.2.5 Use the information above calculate the cross elasticity of demand.(4)4.3Study 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. 4.3.1What is depicted by the extract above(1)4.3.2How is the slope of the supply curve?.(1)4.3.3Briefly describe the term price elasticity of supply.(2)4.3.4Explain any challenge that may be experienced by producers when they have to increase supply in the short run.(2)4.3.5Calculate the elasticity of supply for cheese.(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 Cognitive5.1.Briefly discuss relative inelastic demand without the aid of a graph. (2x4)(8)5.2Distinguish between elasticity and inelasticity. of demand.(2x4)(8)5.3With the aid of a graph, explain the relationship between an increase in consumption, total utility and marginal utility.(2x4)(8)5.4Discuss time and availability of labour as factors that determine price elasticity of supply(2x4)(8)5.5Briefly discuss any TWO characteristics of utility.(2x4)(8)5.6Elaborate on the importance of price elasticity of demand to producers.(2x4)(8)5.7What reasons would you give for the reaction of consumers to price? changes?(2x4)(8)QUESTION 6Paragraph type questions – Higher cognitive6.1How can the government benefit from having knowledge on elasticity of demand?(2x4)(8)6.2Why is the demand elasticity of importance to the economy?(2 x 4)(8)6.3 Why are relative prices important in the economy?(2 x 4)(8)SECTION CHINT: 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 STRUCTUREHINT: 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: STRUCTURE OF ESSAY:MARK ALLOCATION:IntroductionThe introduction is a lower-order response.A good starting point would be to the main concept related to the question topicDo not include any part of the question in your introduction.Do not repeat any part of the introduction in the bodyAvoid saying in the introduction what you are going to discuss in the bodyMax 2Body:Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ EvaluateAdditional part: Give own opinion/ Critically discuss/ Evaluate/ Critically evaluate/ Draw a graph and explain/ / Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/ How/ SuggestMax 26Max 10ConclusionAny Higher or conclusion include:A brief summary of what has been discussed without repeating facts already mentioned in the bodyAny opinion or value judgement on the facts discussedAdditional support information to strengthen the discussion/analysisA contradictory viewpoint with motivation, if required RecommendationsMax 2TOTAL40[40]QUESTION 7(PRICE ELASTICITY OF SUPPLY)40 MARKSWith 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 MARKSWith 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)A maximum of 8 marks allocated for headings/sub-headings and examples)QUESTION 9PRICE 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 10PRICE ELASTICITYWith the aid of graphs, discuss the following types of price elasticity of demand: Perfectly inelastic.(8)Relatively elastic (8)Unitary elasticity (10) (26)Of what importance is price elasticity of demand to the entrepreneur? (10)QUESTION 11With the aid of fully labelled diagrams, discuss types of price elasticity ofdemand. (26)What reasons would you give for the reaction of consumers to price changes. (10)TOPIC :4MICROECONOMICS:ECONOMIC GROWTHSECTION A: TYPICAL EXAM QUESTIONSECONOMIC GROWTHQuestion 1Section A – Short QuestionsHINT: 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 number1.1.1Purchasing from BEE-qualifying businesses, small businesses and black owned businesses is known as …A ownership.B preferential procurementC management.D empowerment.1.1.2 This is used to help beneficiaries acquire ownership of fixed residential property.AProperty subsidyBLand restitutionCLand redistributionDBEE1.1.3An increase in the production of goods and services in a country over a year in physical terms:AEconomic development B Economic growthC InvestmentD.Savings1.1.4The state’s wealth includes unspent money balances such as …AinvestmentBroadsCbank depositsDloans1.1.5The … is a mathematical device used to compare income distribution over time and between economiesAwealthBGini-coefficientCNet-worthDLorenz curve1.1.6 The following can be used to increase aggregate demandA lower interest ratesB increase capitalC discovering new raw materialsD.increase taxation1.1.7This state-owned entity is responsible for managing the country’s airports: A SAPO B SAA C ACSAD.SABC1.1.8The process whereby countries and societies are transformed economically is known as economic Agrowth Bdevelopment CredressDrecession1.1.9The value of the Gini coefficient ranges betweenA100 and 1?000.B10 and 100.C1 and 10.D0 and 1A graph that shows how uneven the distribution of income is between households is called the ...ALaffer curveBPhilips curveCCircular flowDLorenz curve1.1.11High-income earners are taxed at a higher rate:AProportionalBRegressiveCProgressiveDIndirect tax1.1.12The standard of living of a population is best described by the …Alow economics growth.BPer capita income. Cdecrease in expenditure.Dsecondary education.1.1.13The value of the Gini-coefficient ranges between...A0 and 1.B10 and 100.C1 and 10.D0 and 100.1.1.14… measures the economic growth in percentage from one period to another.AReal economic rateBEconomic growth rateCInflationDGDI1.1.15The ... is used to measure the standard of living in a country.A Level of per capita incomeBInflationCBalance of payment accountDProducer price index1.1.16Gini coefficient of ONE represents ... distribution of wealth in the economy. Aperfectly equalBidentical CstraightDperfectly unequal1.1.17... refers to the welfare of all people and their ability to maintain an acceptable existence.APovertyBProductivityCStandard of livingDEconomic growth1.2 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 –1.2.11) in the ANSWER BOOK.COLUMN ACOLUMN B1.2.1WealthA.Actual expenditure by a firm on purchase of a factor input 1.2.2Gini coefficientB.Financial assistance that need not be repaid1.2.3 GrantsC.The wealthiest layer of society1.2.4 The law of supplyD.When a country’s stock of capital increases at the same rate as the workforce.1.2.5 InheritanceE.Consists of monetary assets such as cash, bank deposits, invest-ment, loans and shares.1.2.6.Per capita incomeFStates 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.1.2.7 Upper classGThe use of power by individuals for illegitimate private gain.1.2.8.EquityHWealth passed on from one generation to the next.1.2.9.Poverty payIRelates to how fairly income and opportunity are distributed between different groups in society.1.2.10CorruptionJExists when the earnings from paid work do not result in a living wage and fail to push people out of poverty.1.2.11Financial wealthKA statistical measure used to express the inequality of income distribution.LMeasures the average income earned per person in a given area (city, region, country, etc.) in a specified year.1.3Provide 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 Implies an increase in the standard of living of the entire population.1.3.2 Occurs when the capital stock grows at the same rate as the labour force.1.3.3 A mathematical device used to compare income distributions over time and between economies.1.3.4.Benefits that can make a considerable impact on final income, increasing it considerably for the poorest, and narrowing the gap between rich and poor.1.3.5 An increase in the inflation adjusted market value of the goods and services produced by an economy over time.1.3.6 An example of income redistribution by taking a small amount of earned income and storing it over time1.3.7An Act whose main focus was encouraging black people’s involvement in the economy through ownership of businesses and assuming senior leadership positions within organisations.1.3.8Legislation on the empowerment of women is aimed at elevating the status of women 1.3.9Consists of real assets such as land, buildings, trading stock, machines, furniture and clothes that are owned by the participants of the circular flow.1.3.10Consists of the wealth of households, the wealth of the business sector and the wealth of the government sector.1.3.11Refers to the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area.1.3.12Income per member of the population of a country.1.3.13The index that measures the inequality of income.1.3.14Relationship between the quantity of output and quantity of input.1.3.15A curve that shows how nation’s wealth is distributed across its population.1.3.16Stock of capital assets of households, representing money earned and saved at some point of time.1.3.17Shows whether the gross national income is divided fairly equally amongst its Population,SECTION BQUESTION 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 4.1.12.1List any TWO methods of growing the economy(2x1)(2)2.2Name any TWO ways of classifying income inequality(2x1)(2)2.3Name any TWO factors that influence the income levels.2.4List any TWO redress redistribution methods used by the South African Government.(2x1)(2)2.5Name TWO main factors causing economic growth.(2x1)(2)2.6List any TWO sources of wealth.(2x1)(2)2.7Name any TWO ways of classifying wealth.(2x1)(2)2.8List any TWO characteristics of wealth(2x1)(2)2.9List any TWO factors that can cause constrains to economic growth (2x1)(2)2.10Name any TWO examples of social grants.(2 x 1) (2)2.11List any TWO non-monetary factors that are used to determine a country’s standard of living.(2 x 1) (2)2.12Name TWO social indicators related to income distribution.(2x1)2.13Name TWO factors that promote economic growth.(2x1)2.14List TWO ways in which wealth can be created.(2x1)2.15Mention any TWO uses of per capita GDP. (2x1)QUESTION 3: HINT: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.23.1How does distribution of wealth differ from distribution of income?(1x2)(2)3.2What is the effect of the inequality of opportunity?(1x2)(2)3.3What is the impact of a higher Gini co-efficient in an economy?(1x2)(2)3.4How can land reform be used as wealth redistribution?(1x2)(2)3.5What is the long-term effect of the national minimum wage?(1x2)(2)3.6Why does the South African government use the progressive tax system? (1x2)(2)3.7How is land reform benefiting South African citizens?(1x2)(2)3.8What is the impact of economic growth to living standards?(1x2)(2)3.9How can economic growth neutralize the effect of population growth to standard of living?(1x2)(2)3.10What is the impact of a life expectancy to living standard.(1x2)(2)3.11How is the standard of living in a country determined?(1x 2)3.12What is the use of the Gini-coefficient?(1x 2)3.13How does wealth differ from income?(1x2)3.14What effect does a low economic growth rate have on the economy?(1x2)3.15Why does South Africa need to increase its economic growth rate?(1x2)3.16What is the meaning ‘per capita income’?(1x2)3.17What is ‘income inequality’?(1x2)3.18What do we measure using the Lorenz curve?(1x2)DATA RESPONSEHINT: 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 documentQUESTION 44.1Study the diagram below and answer the questions that follow:4.1.1What is represented by the shaded area A? (1)4.1.2Name any ONE reason for the use of the Gini coefficient.(1)4.1.3Explain the term Lorenz curve.(2)4.1.4What happens when the Lorenz curve is away from the line of equality?(2)4.1.5Why is income and wealth in a country such as South Africa so unequally distributed?(4)4.2Study the Gini coefficients for a selected group of nations in the table below, and answer the following questions:COUNTRYGINI INDEX%COUNTRYGINI INDEX%Japan24.9United Kingdom36.0Sweden25.0Iran43.0Germany28.3United States46.6France32.7Argentina52.2Pakistan33.0Mexico54.6Canada33.1South Africa57.8Switzerland33.1Namibia70.74.2.1Which country has the highest income inequality?(1)4.2.2Which institution publishes the information above(1)4.2.3Briefly describe the term Equity(2)4.2.4What is the relationship between the Lorenz curve and the Gini-coefficient?(2)4.2.5Convert the Gini Indexes to the Gini coefficient for South Africa, France and the United Kingdom. Do not show calculations(4)4.3Study the extract below and answer the questions that follow:THE WEALTH CREATION PROCESSWealth 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[Adapted from ‘Solution for all’]4.3.1Mention ONE other source of wealth other than inheritance.(1)4.3.2What makes wealthy people to be essential in the market economy?(1)4.3.3Briefly explain the term wealth creation process (2)4.3.4Explain how the individuals create wealth. (2)4.3.5What criteria should goods meet for us to refer to their possession as wealth? (4)4.4.Study the graph below and answer the questions that follow:4.4.1Name the curve that represents the Lorenz curve(1)4.4.2What does A represent?(1)4.4.3Briefly explain the term Lorenz curve.(2)4.4.4What happens when the Lorenz curve is away from the line of equality?(2)4.4.5 Why is income and wealth in a country such as South Africa so unequally distributed?(4)4.5Study the information below and answer the questions that follow:50355536830LIFE EXPECTANCY TRENDS IN AFRICAAfrica Month - our continent celebrates from Rasben Sakka in Tunisia to Cape Agulhas in South AfricaLife 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.YEARLIFE EXPECTANCY AT BIRTH WITHOUT HIVLIFE EXPECTANCY AT BIRTH WITH HIV201465,552,1201566,356,0201667,958,7201767,161,2[Source: .za/Public Sector Manager - May 2017]00LIFE EXPECTANCY TRENDS IN AFRICAAfrica Month - our continent celebrates from Rasben Sakka in Tunisia to Cape Agulhas in South AfricaLife 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.YEARLIFE EXPECTANCY AT BIRTH WITHOUT HIVLIFE EXPECTANCY AT BIRTH WITH HIV201465,552,1201566,356,0201667,958,7201767,161,2[Source: .za/Public Sector Manager - May 2017] 4.5.1Name the type of indicator under which life expectancy is classified(1)4.5.2Give ONE reason for low life expectancy levels in Africa.(1)4.5.3Briefly describe the term life expectancy.(2)4.5.4What impact will HIV/AIDS have on productivity levels(2)4.5.5Evaluate the factors which brought about the improvement in life expectancy from 52,1 years to 61,2 years (2 x 2)(4)4.6 Study the curve below and answer the questions that follow.4.6.1Which international institution provided the data in the extract?(1)4.6.2When did the income disparities in South Africa increase drastically(1)4.6.3Briefly describe the term ‘Gini coefficient’(2)4.6.4Why does South Africa have one of the highest rates of inequality in the world?(2)4.6.5Analyse any TWO constraints to economic growth.(2 x 2)(4)4.7Study the extract below and answer the questions that follow:47752056515EDUCATION STATISTICS FOR SOUTH AFRICAEducation indicatorPercentageEffects on wealth creationEnrolment in secondary school57% of total possibleAlmost half of the population does not get matric – less likely to be employed.Enrolment in tertiary education15%Severe lack of degrees and diplomas impact on skills workforce – negative impact on human capital.Literacy rate88%Almost 12% of the population cannot read and write- few job prospects.[Source]00EDUCATION STATISTICS FOR SOUTH AFRICAEducation indicatorPercentageEffects on wealth creationEnrolment in secondary school57% of total possibleAlmost half of the population does not get matric – less likely to be employed.Enrolment in tertiary education15%Severe lack of degrees and diplomas impact on skills workforce – negative impact on human capital.Literacy rate88%Almost 12% of the population cannot read and write- few job prospects.[Source]4.7.1What percentage is the enrolment in secondary education?(1)4.7.2What impact does the literacy rate have on wealth?(1)4.7.3What has led to the low enrolment in tertiary education?(2)4.7.4Explain how lack of education can lead to low standard of living(2)4.7.5How should higher education inequalities be addressed to improve the standard of living of South Africa(4) Study the graph below and answer the questions that follows:Identify the curve (Z) in the above graph(1)What does the straight-line OB represent?(1)Identify the shaded area (Y). (2)What is the relationship between line OB and curve Z?(2)Fully explain the concept Gini coefficient. (4) .HINT: All section B questions have TWO 8 marks questions, numbered according to questions not like in this document.QUESTION 5Paragraph type questions – Middle Cognitive5.1Examine the reasons for the unequal distribution of income. (2x4)(8)5.2Briefly explain how wealth is created through savings. (2x4)(8)5,3Differentiate between economic growth and economic development.(2x4)(8)5.4Distinguish between productive inefficiency and allocative inefficiency as constrains on economic growth. (2x4)(8)5.5Briefly discuss the importance of Economic Growth. (2x4)(8)5.6Discuss cash benefits and benefits in kind as international income distribution methods.( 2x4)(8)5.7Briefly explain why economic growth is one of the state’s macro-economic objective?(8)5.8Differentiate between physical wealth and financial wealth.(8)5.9Discuss the availability and use of factors of production as a way of growing the economy(8)5.10 Discuss how income is redistributed in South Africa.(8)5.11 Briefly explain ‘taxation’ as a method of redistributing income and wealth(8)QUESTION 6Paragraph type questions – Higher cognitive6.1How successful have South African policies been to redress income inequality?(2x4)(8)6.2Evaluate the success of the Black Economic Empowerment Act.(2x4)(8)6.3Evaluate income inequality with the aid of a graph.(2x4)(8)6.4How can aggregate supply be used as a method of growing the economy?(2x4)(8)6.5Evaluate the recent growth experience in South Africa.(2x4)(8)6.6 How is wealth created through saving?.(8)6.7How does capital formation determine economic growth? (8)6.8Discuss saving and entrepreneurship as the determinants of wealth creation.(8)6.9Evaluate South Africa’s approach to redistribute wealth and income(8)6.10What is the relationship between the Lorenz curve and the Gini coefficient? (8)SECTION CHINT: 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 STRUCTUREHINT: 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: STRUCTURE OF ESSAY:MARK ALLOCATION:IntroductionThe introduction is a lower-order response.A good starting point would be to the main concept related to the question topicDo not include any part of the question in your introduction.Do not repeat any part of the introduction in the bodyAvoid saying in the introduction what you are going to discuss in the bodyMax 2Body:Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ EvaluateAdditional part: Give own opinion/ Critically discuss/ Evaluate/ Critically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/ Briefly debate/ How/ SuggestMax 26Max 10ConclusionAny Higher or conclusion include:A brief summary of what has been discussed without repeating facts already mentioned in the bodyAny opinion or value judgement on the facts discussedAdditional support information to strengthen the discussion/analysisA contradictory viewpoint with motivation, if required RecommendationsMax 2TOTAL40QUESTION 7Discuss the methods used by the government to redistribute income and wealth.Explain the reason for the unequal distribution of income, and how these can be overcome.[40]QUESTION 8Discuss in detail the following methods used to redistribute income and wealth:Taxes (10 marks)Cash grants (8 marks)Natura benefits (8 marks)Evaluate the government’s efforts to redress economic inequality in South Africa(10 marks)[40] ................
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