GRADE 10 PAPER2 JUNE EXAMINATION

Transcription

1 ECONOMICS GRADE 10 PAPER2 JUNE EXAMINATION 2015 MARKS: 100 TIME: 1 HOUR This question paper consists of 10 pages including the cover page. 1

2 INSTRUCTIONS AND INFORMATION 1 Answer THREE questions as follows in the ANSWER BOOK: SECTION A: SECTION B: SECTION C: COMPULSORY Answer any ONE of the two questions. Answer any ONE of the two questions. 2 Answer only the required number of questions. Answers in excess of the required number will NOT be marked. 3 Number the answers correctly according to the numbering system used in this question paper. 4 Write the question number above each answer. 5 Read the questions carefully. 6 Start EACH question on a NEW page. 7 Leave 2 3 lines between subsections of questions. 8 Answer the questions in full sentences and ensure that the format, content and context of your responses comply with the cognitive requirements of the questions. 9 Use only black or blue ink. 10 You may use a non-programmable pocket calculator. 11 Write neatly and legibly. 2

3 SECTION A (COMPULSORY) QUESTION 1 20 MARKS 10 MINUTES 1.1 Various options are provided as possible answers to the following questions. Choose the answer and write only the LETTER (A C) next to the question number ( ) in the ANSWER BOOK, for example C A supplier who can decide on the price of his products is known as... A Price-maker B Perfect producer C Price-taker Indicate which item is not revealed by a production possibility curve... A The demand for a combination of goods. B The maximum possible output C Certain combination beyond the curve that cannot be produced The effect of indirect taxes on goods and services is to... A Decrease their prices B Encourage consumption C Increase their prices When a minimum wage is instituted in an economy it usually results in... A A deficit of labour B A surplus of labour C Higher demand for labour Ceteris paribus refers to... A All other factors remain unchanged. B A change in price due to a change in climatic conditions. C A change in quantity demand due to price change. (5x2) (10) 3

4 1.2 Choose a description from COLUMN B that matches an item in COLUMN A. Write only the LETTER (A H) next to the question number ( ) in the ANSWER SHEET. COLUMN A COLUMN B Public goods and services A These are goods and services provided by the private sector to the country s inhabitants Taxation B An indirect tax to discourage consumption of a good Oligopoly C They are goods and services characterised by non-rivalry and nonexcludability Wage subsidy D A compulsory contribution levied by the state on its citizens and noncitizens Opportunity cost E A market with few large suppliers. F There is only one seller of a product. G Financial aid paid towards the labour s remuneration cost. H The value of any alternative that is given up when the choice is made. (5 x 1) (5) 1.3 Give ONE term for each of the following descriptions. Write only the term next to the question number ( ) in the ANSWER BOOK The satisfaction a person gets from consuming goods or services The curve that shows the different combinations of goods and services that give the same total satisfaction It takes place when there is an efficient use of all available resources It occurs when the market fails to supply a good or service or supplies too little of it Financial assistance provided by government to influence the consumption and production of goods and services. (5 X 1) (5) TOTAL SECTION A: 20 MARKS 4

5 SECTION B Answer any ONE of the two questions in this section in the ANSWER SHEET. QUESTION 2: MICROECONOMICS 40 MARKS 25 MINUTES 2.1 Answer the following questions: Name two characteristics of utility. (2 X 1) Explain nationalisation. (1 X 2) /4/ 2.2 Study the cartoon below and answer the questions that follow. Source: Identify the type of market illustrated in the above cartoon. (2) How is the price determined in this market? (2) Why are the participants in this market called price-takers? (2) Explain TWO characteristics of this market. (4) /10/ 5

6 2.3 Study the table below and answer the questions that follow. COMBINATIONS OF BANANAS AND APPLES THAT GIVE THE SAME LEVEL OF CONSUMER SATISFACTION Combination Bananas Apples A 1 5 B 2 3 C What is the curve that indicates a combination of two products that give the same level of satisfaction to the consumer? (2) How many apples is the consumer willing to sacrifice for an extra banana at point B? (2) What is the relationship between budget line and indifference curve? (2) Use the table to draw an indifference curve. (4) 2.4 Explain how the indifference curves differ from other curves. (8) 2.5 Briefly discuss two reasons for state intervention in the economy. (8) [40] /10/ 6

7 QUESTION 3: PUBLIC SECTOR & PPC 40 MARKS 25 MINUTES QUESTION Answer the following questions: List two examples of community goods. (2 X 1) How does price relate to value? (1 X 2) /4/ 3.2 Study the following cartoon and answer the questions that follow: Source: Define subsidies. (2) What message is conveyed by the cartoon? (2) Mention one subsidy that is given to consumers to improve their welfare. (2) How can subsidies on farmers positively affect the economy? (4) /10/ 7

8 3.3 Study the graph below and answer the questions that follow What is indicated by the points along the curve? (2) Explain what is happening in point X. (2) Is point Y possible to achieve? (3) Draw the new PPC showing what will happen if the number of resources used increases thus leading to an increase in the production of both products. (HINT: DRAW THE ORIGINAL PPC FIRST) (3) /10/ 3.4 Explain how government welfare programmes and grants assist the poor. (8) 3.5 Briefly discuss factors that can cause a change in the supply for a good or service. (8) [40] 8

9 SECTION C: ESSAYS Answer any ONE of the two questions from this section in your ANSWER SHEET STRUCTURE OF THE ESSAY: MARK ALLOCATION: Introduction Max 2 Body: Main Part For example: Discuss in detail/in-depth discussion/examine/critical discuss/analyse/compare/evaluate/distinguish/explain/assess/ Debate Max 26 Additional Part For example: Give own opinion/critically discuss/evaluate/critically evaluate/draw a graph or diagram and explain/use the graph given and explain/complete the given graph/calculate/deduce/compare/explain/distinguish/interpret/ Briefly debate Max 10 Conclusion Max.2 TOTAL 40 QUESTION 4 40 MARKS 35 MINUTES The way prices are formed in the markets is the result of complex interactions between demand and supply. With the aid of a graph, discuss price formation in the market. (26) Discuss the functions of a market. (10) 9

10 QUESTION 5 The value of subsidies and other transfers in South Africa has increased over the years. Discuss subsidies and welfare grants as methods of public sector Involvement in the market. (26) How does the implementation of minimum wages benefit employees. (10) TOTAL MARKS : 100 [40] 10

11 ECONOMICS GRADE 10 PAPER 2 JUNE EXAMINATION 2015 MARKING MEMORANDUM MARKS: 100 1

12 SECTION A QUESTION A (Price maker) C (Certain combination beyond the curve that cannot be produced) C (Increase their prices) B (A surplus of labour) A (A change in price with all other factors remain unchanged) C D E G H (5 X 1) (5) Utility Production Possibility Curve Technical efficiency Market failure Subsidy (5 X 1) (5) 2

13 TOTAL FOR SECTION A: 20 MARKS SECTION B QUESTION 2: MICROECONOMICS 40 MARKS 2.1 Answer the following questions It differs from place to place It differs from person to person It differs from time to time It cannot be measured Items with high utility are not always useful Nationalisation is a process whereby the state acquire privately owned businesses. (2 X 1) (1 X 2) /4/ 2.2 DATA RESPONSE Perfect market Through the interaction of demand and supply. (2 marks for a full sentence, 1 mark for demand and supply only) Because it cannot influence the market price but it take or use the existing market price It has a large number of buyers and sellers. Homogeneous products are sold. There is a freedom to entry and exit. Perfect information is available to both buyers and sellers Sellers have no influence over the existing market price. (It has to be a full sentences to qualify for full 2 marks) 3

14 2.3 Study the table below and answer questions that follow Indifference curve. (2) (2) The consumer`s choices of a combination of the two products is limited by the budget available. (accept any other relevant explanation) (2) Indifference curves MARK ALLOCATION Bananas 3 2 C B Labelling of axis: 1 mark Indication of point A: 1 mark Indication of point B: 1 mark Indication of point C: 1 mark TOTAL: 4 MARKS 1 A Apples 2.4 They are down wards sloping. Higher indifference curves are preferred to lower ones. Indifference curves do not intersects/cross. Indifference curves are bowed inwards. (2 x 4) (8) Provision of public goods and services. The private sector cannot provide such services because they are (2 X 4) 4

15 communal in nature as a result very few would afford in order for them to be accessible they must be provided by the state. 2. Protection of consumers. Consumers are suppose to be protected against unfair practices by monopolises by setting maximum prices for basic foodstuffs. (8) (ACCEPT ANY OTHER RELEVENT FACTS) (MAXIMIUM 4 MARKS FOR LISTING ONLY) QUESTION 3: 3.1 Answer the following questions: Free education /Free stationery/public schools /No fee schools. Street lights Public goods Free health care/free medication (ACCEPT ANY OTHER RELEVENT ANSWER) The value of the product is expressed in terms of the price. The higher the price of the product the higher the value for that product and vice versa. (2 X 1) (2) (1 X 2) (2) /4/ 3.2 Study the following cartoon and answer the questions that follow: A subsidy refers to financial assistance provided by the government to the producer to reduce the cost of production / to the consumer to improve their welfare. (accept any other relevant answer) (2) Farm / producer subsidies are usually higher than consumer / (2) 5

16 individual subsidies. (accept any other relevant answer) Food subsidies, health services, education etc. (2) Increase in agricultural products, increase in employment, increase the GDP of a country. (accept any other relevant answer) /10/ 3.3 DATA RESPONSE They indicate that production is possible/can take place at any combination along the curve. (2) Waste of resources/inefficiency. (2) No, the quantity in both products cannot be increased using the available resources. (accept any other relevant answer) (3) (3) 6

17 MARK ALLOCATION Labelling of axis: 1 mark Correct shifting of the curve to the right: 2 marks Total: 3 marks PRODUCT A PRODUCT B /10/ 7

18 3.4 Welfare programmes aim to ensure that people have adequate Economic and social protection during times of unemployment, old aged, ill health, etc. These programmes enable poor households to provide suitable care for their members especially children and the vulnerable. They improve the quality of life of the disadvantaged. Other government welfare programmes include old age, care dependency (for mentally and physically challenged) and child support grants. 4 x 2 (8) (accept any other relevant explanation) Change in industry size The larger the industry the larger the total supply will be. 2. Change in production technique Improved production techniques enables enterprises to Produce more goods at lower costs. 3. Cost of production If the cost of producing a product increase it will affect the Quantity of products that are produced at each price. 4. Competing goods. An increase in the price of competing goods will decrease the supply of goods whose price remains unchanged because the supplier would rather produce a product that gets a higher price. 5. Government policy Taxes levied by the state on some goods will increase their cost And price will lead to a reduction in supply. 6. Natural factors Things such as droughts or floods can affect supply. max.8 (maximum 4 marks for listing only) [40] 8

19 SECTION C: ESSAYS Answer any ONE of the two questions from this section in your ANSWER SHEET. STRUCTURE OF THE ESSAY: MARK ALLOCATION: Introduction Max 2 Body: Main Part Max 26 For example: Discuss in detail/in-depth discussion/examine/critical discuss/analyse/compare/evaluate/distinguish/explain/assess/ Debate Additional Part For example: Give own opinion/critically discuss/evaluate/critically evaluate/draw a graph or diagram and explain/use the graph given and explain/complete the given graph/calculate/deduce/compare/explain/distinguish/interpret/ Briefly debate Max 10 Conclusion Max 2 TOTAL 40 9

20 QUESTION 4: With the aid of a graph, discuss price formation in the market. (26) Discuss the functions of market. (10) INTRODUCTION A market refers to a place or any circumstances where buyers and sellers meet to exchange goods and services (2) (accept any other relevant introduction) Demand and supply graph D S PRICE (R) 30 E S D 80 QUANTITY Labelling of axis = 1 mark Labelling on axis = 1 mark Labelling of DD = 1 mark Labelling of SS = 1 mark Indication of E = 2 mark MAXIMUM = 6 marks The market price is R30 and quantity 80. Point E is an equilibrium point where the quantity supplied is equal to the quantity demanded. The price at that point is called equilibrium price and the quantity at that point is called equilibrium quantity. 10

21 Quantity demanded is high if the price is low and vice versa. Quantity supplied is low if the price is low and vice versa. If the price charged is less than R30 (equilibrium price) the quantity demanded will be higher than what is available in the market. At any price above R30 there will be a surplus stock. At any price below R30 there will be a shortage because more will be demanded due to a fall in price. DD is the demand curve which is down ward sloping from left to right (adverse relationship between the price and quantity) SS is the supply curve which is upward sloping from left to right (positive relationship between the price and quantity) E is the equilibrium point, at this point there will be no surplus stock in the market and each and every consumer will be able to get the quantity that is needed. any 10 x 2 (20) ADDITIONAL PART (FUNCTIONS OF MARKETS) (26) 1. Markets bring supply and demand together Markets are the interaction of consumers and producers to negotiate price and exchange goods and services. 2. Markets lead to an efficient allocation of resources. The market show s producers what consumers want and much of it they will buy. If the demand for a product decreases, so will supply of that product in that way the market determines what is going to be produced, which is known as allocating function. 3. Market are self-regulatory A market is able to guide and control itself in order to come up with best price and the best way to use the resources through supply and demand mechanism. MAX (10) Conclusion Demand serves as a guide on what to produce, how is it going to be produced and for whom will production take place. (2) 11

22 (ACCEPT ANY RELEVANT CONCLUSION) /40/ QUESTION 5: Discuss subsidies and welfare grants as methods of public sector involvement in the market. How does the implementation of minimum wages benefit employees. INTRODUCTION The state may wish to promote the production or use of a particular product or service, in order to do that the state may offer a payment to a firm that provides a product or service to households who need to consume a particular product or service OR The state support those who are unable to support themselves and their dependants in order for them to have access to social security. (2) (ACCEPT ANY OTHER RELEVANT INTRODUCTION) Body Reasons for subsidies to producers To encourage producers to increase the production of certain goods and services. Prevent a decline in the supply of an essential product or services (e.g. maize); Help producers when the market price is very low; Help the country to become self-supportive in food production; Make a product more affordable to general public; or to encourage an increase in employment in a certain industry. To encourage the production of a certain good or services for export purposes. Export subsidies are aimed at: Helping new industries to be more competitive and to gain foothold in world markets; Improving the balance of payments: and creating more job opportunities. Indirect subsidies are also paid to exporters to participate in overseas fair and marketing campaigns to find markets for their goods or services. 12

23 To encourage businesses to create more job opportunities by means of wage subsidies. Employment subsidies are available, for example, for employing people with disabilities, for employing unskilled workers or for giving skills training to workers to reduce unemployment. max.12 Reasons for consumer subsidies To enable consumers to buy goods that they would not normally be able to afford. Income subsidies enable people to enjoy a minimum standard of living. Examples are old-age pensions, childcare allowances and unemployment benefits. To improve education and literacy levels through subsidies to schools and tertiary institutions. The usage of particular product is encouraged e.g. subsidies to HIV positive mothers for their antiretroviral (ARV s) If the state give consumer subsidy the price of that special production (brown bread for example) will be lower than the equilibrium price for those that are receiving the subsidy In that way the consumption of that product will increase as more people will now afford the lower price the production of wheat for example will increase. Social assistance is provided in the form of the grants: social grants, old age grants and disability grants; children social support foster child grants and child support grant and special awards - transport relief. As grants are paid directly to the relevant people they cause an increase in demand which will lead to an increase in price. It is suggested that the welfare grants be paid to the provider of a particular service such as old age homes, this will lower the cost of the service provider and increase the number of elderly people who can use this service. (accept any other relevant fact) max. 14 (26) 13

24 ADDITIONAL PART. The wage rate increase in the market People are being paid a more equitable and fair wage for their service If people earn reasonable income their standard of living improves The exploitation of workers will be reduced. More people will be encouraged to enter the workforce. (accept any other relevant facts) MAX (10) CONCLUSION The state involvement in the market is crucial for economic development. (2) GRAND TOTAL: 100 MARKS 14