NATIONAL SENIOR CERTIFICATE (NSC) GRADE 11 FINAL EXAMINATION ECONOMICS (NDL-31) DURATION: 3 HOURS DATE: 24 OCTOBER 2012

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1 ECOHIG11 NATIONAL SENIOR CERTIFICATE (NSC) GRADE 11 FINAL EXAMINATION ECONOMICS (NDL-31) TIME: 09H00 12H00 TOTAL: 300 MARKS DURATION: 3 HOURS DATE: 24 OCTOBER 2012 This question paper consists of 15 pages. ICG 1 NSC Grade 11

2 INSTRUCTIONS AND INFORMATION Read the following instructions carefully before answering the questions: 1. Write your answers in your answer book, which is provided in the exam. 2. Read the instructions carefully for each question and answer only what is required. 3. Begin with the question for which you think you'll get the best marks. 4. Number the answers correctly according to the numbering system used in this question paper. 5. Except where otherwise instructed, give your answers in full sentences. 6. The mark allocation of each question will determine the length of your answer. Give enough facts to earn the marks allocated. Don't waste time by giving more information than required. 7. Please write neatly we cannot mark illegible handwriting. 8. Start the answer for each question on a NEW page, for example Question 1 new page, Question 2 new page. 9. Any student caught cheating will have his or her examination paper and notes confiscated. The College will take disciplinary measures to protect the integrity of these examinations. 10. If there is something wrong with or missing from your question paper or your answer book, please inform your invigilator immediately. If you do not inform your invigilator about a problem, the College will not be able to rectify it afterwards, and your marks cannot be adjusted to allow for the problem. 11. This question paper may be removed from the examination hall after the examination has taken place. This question paper consists of THREE sections: Section A, Section B and Section C. Question Section Marks A: Multiple-choice questions 1 Correct terms Matching-statement questions TOTAL: Answer ALL the questions B: FIVE questions Answer any THREE of the questions C: FOUR questions Answer any TWO of the questions MARKS ICG 2 NSC Grade 11

3 SECTION A (50 MARKS) ANSWER ALL THE QUESTIONS QUESTION Choose the correct option for each of the following. Write only the question number and your chosen answer. For instance, if you think that the correct answer for number is A, then write it as A are resources that are scarce and that people are willing to pay for. A. Economic goods B. Free goods C. Natural goods Clothes and domestic appliances are examples of goods. A. durable B. non-durable C. semi-durable are the collection of raw materials that can return to nature what is taken from it. A. Exploitative operations B. Genetic operations C. Productive operations The demand curve below indicates: P D D¹ D D¹ Q A. a change in the quantity demanded. B. a decrease in the demand curve. C. an increase in the demand curve Average costs increases when: A. MC = AC B. MC > AC C. MC < AC ICG 3 NSC Grade 11

4 1.1.6 When the change in quantity supplied is greater than the change in price, this is known as: A. elastic supply. B. perfectly elastic. C. unit elastic is the physical circumstances in which people live, the goods and services they are able to consume and the economic resources they have access to. A. Economic development B. Standard of living C. Welfare Joint management of the monetary policy of a region is known as a / an: A. common market. B. customs union. C. economic union Money as a is when money provides a measure that enables us to put a value on goods and services. A. means of payment B. store of value C. unit of account The amount of money needed to pay for basic needs determines the: A. minimum income level. B. minimum living standard. C. minimum wage Since 1994, South Africa has implemented involving the removal and reduction of tariffs. A. bilateral agreements B. international trade agreements C. trade liberalisation strategies Communities faced with a decision as to how best to use an environmental resource can do a / an: A. cost benefit analysis. B. environmental analysis. C. SWOT analysis. (12 2 = 24) ICG 4 NSC Grade 11

5 1.2 Choose the term from the list below that best fits each description. Write only the terms next to the question numbers ( ). LIST: Absolute price; Factors of production; Relative price; Short run; Import quota; Output; Poverty alleviation Natural resources, labour, capital, entrepreneurship The price of one good compared with another Increases business output by using more of its variable factors A limit placed on the quantity of a specific item imported from another country The main focus of the South African 2012/2013 budget (5 2 = 10) 1.3 Choose a description from Column B that matches an item in Column A. Write only the letters (A to J) next to the numbers (1.3.1 to 1.3.8) in the answer book. COLUMN A COLUMN B capital goods and services A. a given percentage increase in the inputs leads to the same percentage increase in the outputs externalities B. goods and services that are not directly consumed globalisation C. businesses that provide transport and finance income D. the additional satisfaction that people gain as they consume one extra unit of a good or service law of diminishing returns E. money in a bank savings account and short, medium and long-term deposits in financial institutions marginal utility F. money received by a household over a period of time quasi money G. each extra unit of the variable factor produces less output than the previous unit service sector H. the integration of trade, financial and consumer markets and investment across the world I. the costs of polluting the environment are later paid by people who become sick J. economic (8 2 = 16) [50] TOTAL SECTION A: 50 ICG 5 NSC Grade 11

6 SECTION B (150 MARKS) ANSWER ANY THREE OF QUESTIONS QUESTION Choose the correct word from those given in brackets. Write only the terms next to the numbers (2.1.1 to 2.1.4) in the answer book: (Money capital / Real capital) is divided into fixed capital and working or floating capital The (financial division / functional division) is based on the nature of the service that is performed An economic system that combines the advantages of both economic systems is referred to as a (mixed economic system / socio-economic system) Koeberg, a (nuclear power / solar energy) station, provides large sources of electricity. (4 2 = 8) 2.2 List THREE categories of labour. (3 2 = 6) 2.3 Study the graph below then answer the questions that follow: Define the term GDP. (2) Name TWO components of GDP. (4) During which year was South Africa's GDP at its highest? (2) Provide ONE reason why you think GDP was the highest during that particular year. (2) ICG 6 NSC Grade 11

7 2.4 Study the table below then answer the questions that follow: Which sector contributed the most to GDP? (2) Name ONE sector found in the primary industry in South Africa. (2) To which industry does electricity belong? (2) What is the total contribution to GDP growth by the tertiary industry? (2) For what reason do you think Agriculture contributed negatively to GDP growth? (2) 2.5 Explain the difference between the formal sector and the informal sector. (8) 2.6 Discuss the economic importance of transport. (8) [50] QUESTION 3 AND / OR 3. Choose the correct word from those given in brackets. Write only the words next to the numbers (3.1.1 to 3.1.4) in the answer book: Payment to workers takes place in the (factor market / product market) As more goods are produced, (fixed costs / variable costs) will increase. ICG 7 NSC Grade 11

8 3.1.3 Income is (elastic / inelastic) when the percentage change in the quantity demanded is greater than the percentage change in income (Utility / Utils) is the amount of satisfaction that consumers get from using or consuming a good or service. (4 2 = 8) 3.2 List THREE types of price elasticity of demand. (3 2 = 6) 3.3 Study the graphs below then answer the questions that follow: Price of cooldrink (rands) P D P GRAPH 1 GRAPH 2 P D D¹ B A Q D Q Price of juice (rands) A D B D¹ Q Quantity of cooldrink Quantity of juice What is the relationship between cooldrink and juice? (2) What happens to the quantity of cooldrink demanded when the price of cooldrink increases? (2) What happens to the demand for juice when the price of cooldrink increases? (2) Which graph refers to a change in demand? (2) Which graph refers to the law of demand? (2) 3.4 Study the table below then answer the questions that follow: OUTPUT (Q) FIXED COSTS (FC) VARIABLE COSTS (VC) TOTAL COSTS (TC) AVERAGE FIXED COSTS AFC =FC/Q AVERAGE VARIABLE COSTS AVC= VC/Q AVERAGE COSTS AC = TC/Q MARGINAL COSTS MC= TC/ Q A B C ,4 7,4 9,9 D ICG 8 NSC Grade 11

9 3.4.1 Complete the table above by calculating the following costs: A. Average Fixed Cost (AFC) B. Average Variable Cost AVC) C. Average Cost (AC) D. Marginal Cost (MC) (4) Which cost curve relates to the law of diminishing returns? (2) What happens to the AFC as production increases? (2) How are fixed costs represented on a cost curve? (2) 3.5 Explain the factors that affect the supply of a product. (8) 3.6 Discuss the economies and diseconomies of scale. (8) [50] AND / OR QUESTION Choose the correct word from those given in brackets. Write only the words next to the numbers (4.1.1 to 4.1.4) in the answer book: The government can assist the poor with its (wealth / welfare) policy (Developed countries / Developing countries) are highly industrialised When countries share resources, technology and expertise and work together, this is known as (economic co-operation / economic integration) (Commercial banks / Merchant banks) do business in the corporate world by discounting trade bills. (4 2 = 8) 4.2 List THREE social indicators. (3 2 = 6) 4.3 Study the graph below then answer the questions hat follow: Per capita Gross Domestic Product at current prices [SOURCE: EUROSTAT] ICG 9 NSC Grade 11

10 4.3.1 How does the per capita GDP of Africa compare with that of the EU countries from 2007 to 2009? (4) How does the per capita GDP of Africa compare with that of the EU countries in terms of monetary value? Illustrate with an example. (4) What can you conclude about the employment situation in Africa? (2) 4.4 Study the map of Africa below then answer the questions that follow: Name any TWO countries that form part of the Southern African Customs Union (SACU). (2) Name any TWO countries that are regarded as the least developed of the developing countries that are members of the Southern African Development Community (SADC). (2) What are the aims of the African Union (AU), launched in South Africa in 2002? (4) Name one other economic grouping or demarcation in Africa. (2) 4.5 Discuss the reasons for differences in wealth distribution. (8) 4.6 Explain the characteristics of developing countries. (8) [50] AND / OR QUESTION Choose the correct word from those given in brackets. Write only the words next to the numbers (5.1.1 to 5.1.4) in the answer book When people live below the minimum income level, it is known as (absolute poverty / relative poverty). ICG 10 NSC Grade 11

11 5.1.2 (An absolute advantage / A comparative advantage) means that a country is better equipped to produce a product than other countries The countries in the (north / south) produce more than 80% of the world's manufacturing outputs (GATT / WTO) sets the rules on how international trade should take place. (4 2 = 8) 5.2 List THREE effects of poverty. (3 2 = 6) 5.3 Study the table below the answer the questions that follow: TABLE: Households without toilets / buckets Province Difference EC FS LP NC [SOURCE: HSRC SEMINAR SERIES, 2011] Which province had the highest number of households without toilets / buckets in 2009? (2) What do the figures in the Difference column mean? (2) Which province generally had the smallest number of households without toilets / buckets over the years? (2) What do you notice about the number of households without toilets / buckets in the four areas? (2) Why are these conditions not acceptable for South Africa? (2) 5.4 Read the article below then answer the questions that follow: South Africa: Environmental Issues The two major types of pollution in South Africa are air and marine pollution. The industrial sector is the prime contributor to air pollution. More than 90% of South Africa's electricity is generated from the combustion of coal. Coal combustion can lead to particulate matter in the air, as well as contribute to acid rain. While major cities in South Africa do not possess pollution levels comparable to many major cities in China, India or Mexico, pollutant levels are not insignificant. South Africa is especially vulnerable to oil spills owing to the high volume of oil transported around the country's coasts by ships from the Middle East to Europe and the Americas. Measures supported by the Department of Transport include the maintenance of at least a 12-mile distance from the South African coast, prosecution of ship owners if any oil is discharged from their ships, control by aircraft patrols over shipping lanes, and contingency plans for any oil spills that occur. ICG 11 NSC Grade 11

12 5.4.1 Name ONE other type of pollution not mentioned in the article. (2) Which economic sector contributes mostly to pollution in South Africa? (2) With which major city in America is South Africa's pollution levels comparable? (2) What could be a cause of South Africa's marine pollution? (2) List ONE measure that may be implemented by the South African government to protect the South African coast. (2) 5.5 Explain the consequences of globalisation. (8) 5.6 Discuss the causes of poverty. (8) [50] QUESTION 6 AND / OR 6.1 Choose the correct word from those given in brackets. Write only the words next to the numbers (6.1.1 to 6.1.4) in the answer book (Fiscal policy / Monetary policy) involves decisions made by the government on tax levels and government spending Products and services that are used together to satisfy a particular desire are known as (complementary goods / substitute goods) The (AU / NEPAD) aims to face the economic challenges of the continent together The (OECD / OPEC) was formed to co-ordinate the price and supply of oil. (4 2 = 8) 6.2 List THREE major trade blocs. (3 2 = 6) 6.3 Refer to the pictures below and answer the questions that follow: ICG 12 NSC Grade 11

13 6.3.1 What is micro-financing? (2) How is micro-financing different from making a loan at the bank? (2) List one positive aspect of micro-financing. (2) Name one problem with micro-financing. (2) Mention one way that micro-financing has changed lives. (2) 6.4 Read the article below then answer the questions that follow: Globalisation and communication in the 21st century Globalisation has redefined the modern economy and revolutionised the way we conduct business. We operate in a 24-hour economy where instant communication is a basic currency; leaving customers waiting is not an option for companies wanting to succeed internationally. People make deals across the world within seconds using faxes and computers. Globalisation therefore implies the increasing flow of goods and resources across national borders. The very nature of globalisation is also evolving. At the same time, business culture is changing. Today, more than ever, 'work' is a process that can be carried out from a variety of locations, rather than any single building. The International Monetary Fund (IMF) facilitates international trade and co-operation in financial matters. The challenge for this new phase of globalisation is how to deliver effective communications between disparate teams, ensuring that critical decision-making is not delayed. The answer lies in creating a business that embraces flexibility, transparency and agile working. The World Bank provides long-term loans for development purposes and the World Trade Organisation (WTO) ensures that developing countries have a better share of the growing international trade How has globalisation revolutionised the way we do business? (2) What modern information infrastructure allows people to communicate with each other from different parts of the world? (2) How have we benefitted from globalisation? (2) Name TWO institutions that were formed to set out rules for the international economy. (4) 6.5 Discuss how the injustices of the past were corrected. (8) 6.6 Explain TWO factors that determine the elasticity of demand. (8) [50] TOTAL SECTION B: 150 ICG 13 NSC Grade 11

14 SECTION C (100 MARKS) ANSWER TWO OF THE QUESTIONS Essay responses: should include an introduction, body and conclusion. will have 5 marks allocated for the introduction and conclusion. will have 5 marks allocated for the interpretation of the topic. will have a maximum of 40 marks allocated for the body. QUESTION 7 There are many different economic systems. However, they can be reduced to two extremes. The two extremes are the free market system and the centrally planned economy. Both the free-market system and the centrally planned economy have advantages and disadvantages. Would you choose a free-market economy or a centrally planned economy? Discuss your choice in detail, covering the characteristics, advantages and disadvantages of the particular economy as well as reasons for your choice. [50] QUESTION 8 AND / OR Discuss the following market structures including the demand and supply graphs for each one: perfect markets imperfect markets [50] QUESTION 9 AND / OR The liquidity of banks is very important. However, owing to the global economic recession, many banks across the world have closed down. Discuss bank failures under the following headings: Risks banks face Reasons for failure Consequences of bank failure [50] ICG 14 NSC Grade 11

15 AND / OR QUESTION 10 In November 2011 COP 17 was hosted in Durban. Environmentalists are saying that COP 17 was a waste of time and that nothing positive will come from it! Discuss the problem using the following headings: The interaction between the economy and the environment Reasons for problems Protecting the environment Approaches to sustainability [50] TOTAL SECTION C: 100 GRAND TOTAL: 300 MARKS ICG 15 NSC Grade 11