ECONOMICS
PAPER 2
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

INSTRUCTIONS AND INFORMATION 

1.  Answer FOUR questions as follows in the ANSWER BOOK:
   SECTION A: COMPULSORY
   SECTION B: Answer TWO of the three questions.
   SECTION C: Answer 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. Answer the questions in full sentences and the format, content and  context of your responses must comply with the cognitive requirements  of the questions.
4. Number the answers correctly according to the numbering system used  in this question paper.
5. Write the question number above each answer.
6. Read ALL the questions carefully.
7. Start EACH question on a NEW page.
8. Leave 2–3 lines between subsections of questions.
9. Use only black or blue ink. 
10. You may use a non-programmable pocket calculator.
11. Write neatly and legibly.

QUESTIONS 

SECTION A (COMPULSORY) 
QUESTION 1 30 MARKS – 20 MINUTES 
1.1 Various options are provided as possible answers to the following  questions. Choose the correct answer and write only the letter (A–D) next  to the question number (1.1.1–1.1.8) in the ANSWER BOOK, for example  1.1.9 D. 
1.1.1 The concept that describes the situation where all opposing market  forces are in balance is known as … 

1. collusion. 
2. equilibrium.
3. competition. 
4. demand. 

1.1.2 The assumption used by economists to describe a situation where  all factors remains unchanged, is known as the … rule. 

1. efficient resource allocation
2. stagnation 
3. constant 
4. ceteris paribus 

1.1.3 Cost per unit of production is called … cost. 

1. marginal 
2. total 
3. average 
4. fixed 

1.1.4 The most possible barrier a business might encounter when  competing with other businesses in the motor vehicle industry, for  example VW, is … 

1. licensing. 
2. capital. 
3. technical mastership. 
4. lack of information. 

1.1.5 Telkom is a typical example of a firm in a … market. 

1. monopoly 
2. perfect 
3. oligopoly 
4. monopolistic competitive

1.1.6 When two identical products are sold at different prices to  different consumers, it is known as price … 

1. differentiation. 
2. stability. 
3. policy. 
4. discrimination. 

1.1.7 Goods such as parks, beach facilities and streets are known as  … goods. 

1. collective 
2. private 
3. consumer 
4. demerit 

1.1.8 Most markets do not adjust rapidly to changes in supply and  demand due to a lack of … 

1. information being made available. 
2. resources. 
3. quantities required by consumers. 
4. skills. (8 x 2) (16)

1.2 Choose a description in COLUMN B that matches an item in COLUMN A. Write only the letter (A–I) next to the question number (1.2.1–1.2.8) in the  ANSWER BOOK, for example 1.2.9 K. 

1.3 Give ONE term for each of the following descriptions. Write only the term  next to the question number (1.3.1–1.3.6) in the ANSWER BOOK. 
1.3.1 Costs that change according to the changes in output 
1.3.2 An institution or mechanism that brings together buyers and  sellers of goods and services 
1.3.3 A change in price causes a smaller percentage change in quantity  demanded 
1.3.4 Goods that are highly desirable for the general welfare of the  people but are not highly rated by the market 
1.3.5 A wage set by the government below which no employer will pay  their workers 
1.3.6 Collusion that is open and oligopolies meet formally to decide on  prices and production (6 x 1) (6) 

TOTAL SECTION A: 30

SECTION B 
Answer any TWO of the three questions from this section in the ANSWER BOOK. QUESTION 2: MICROECONOMICS 40 MARKS – 30 MINUTES 2.1 Answer the following questions. 
2.1.1 List TWO forms of labour immobility. (2) 
2.1.2 Why would you prefer to run a monopoly rather than a perfect  competitor? (2) 
2.2 Study the graph below and answer the questions that follow. 

2.2.1 Give an example of a positive externality. (1)
2.2.2 Complete this statement:  A positive externality is a reason for … (1)
2.2.3 Briefly describe the concept private benefits. (2) 
2.2.4 Explain the reason for the shift from DD to D1D1in the graph  above. (2) 
2.2.5 How does the government deal with positive externalities? (2 x 2) (4)
2.3 Study the information below and answer the questions that follow.

[Adapted: Buzzle.com] 
2.3.1 Give an example of a business in a monopoly. (1) 
2.3.2 Identify ONE characteristic of the market structure mentioned in the  cartoon above. (1) 
2.3.3 Briefly describe an artificial monopoly. (2)
2.3.4 Explain a situation where the monopoly has no power. (2) 
2.3.5 Why is the average revenue curve (AR) of a monopoly downward  sloping? (2 x 2) (4) 
2.4 Explain public goods as a reason for market failure. (4 x 2) (8) 
2.5 Justify why a perfect market is unrealistic. (4 x 2) (8) [40]

QUESTION 3: CONTEMPORARY ECONOMIC ISSUES 
40 MARKS – 30 MINUTES 
3.1 Answer the following questions. 
3.1.1 List TWO costs considered by economists in calculating profit. (2) 3.1.2 Why are individual firms in a perfect market considered price takers? (2) 3.2 Study the information below and answer the questions that follow.

3.2.1 In which market structure are cartels formed? (1) 
3.2.2 Which policy does the government use to discourage the  development of monopolies? (1)
3.2.3 What will the Competition Commission do with its findings? (2)
3.2.4 Briefly explain the concept cartel. (2) 
3.2.5 Why is it in the interest of producers to limit the level of competition  in an industry? (2 x 2) (4)
3.3 Study the graphs below and answer the questions that follow.   

3.3.1 Which market structure do the graphs above represent? (1)
3.3.2 Give a correct label for curve H in Graph 2. (1)
3.3.3 What effect will an increase in demand have on the market price? (2) 
3.3.4 Briefly describe the supply curve of an individual firm in this market  structure. (2) 
3.3.5 Why will a business not produce to the left of point ‘g’? (2 x 2) (4) 
3.4 With the aid of a graph, explain why monopolies are considered to be both  productive and allocative inefficient. (8)  
3.5 Suppose there were ‘price wars’ in an oligopoly market. How will these affect  consumers? (8) [40]

QUESTION 4: MICROECONOMICS AND CONTEMPORARY ECONOMIC  ISSUES 40 MARKS – 30 MINUTES 
4.1 Answer the following questions. 
4.1.1 List TWO types of oligopolies as determined by the nature of the  product sold. (2) 
4.1.2 What effect does an increase in taxes on goods have on the  economy? (2) 
4.2 Study the information below and answer the questions that follow.

4.2.1 What is the product or service offered by Transnet? (1)
4.2.2 How much has Transnet lost by not conducting a CBA? (1)
4.2.3 Briefly describe a cost benefit analysis. (2)
4.2.4 Explain a situation where the cost benefit ratio is greater than 1. (2) 
4.2.5 Why is it necessary for Transnet to conduct a cost benefit  analysis before embarking on the purchase of locomotives?  (2 x 2) (4)
4.3 Study the graph below and answer the questions that follow. 

4.3.1 What is the equilibrium quantity level in the oligopoly above? (1) 
4.3.2 Which part of the demand curve is relatively price inelastic? Use the  labelling provided. (1) 
4.3.3 Briefly describe a duopoly. (2) 
4.3.4 How will the dominant firm influence the behaviour of small  competitors in the market? (2) 
4.3.5 Why will the oligopoly not decrease the price from R80 to R40?  Explain by means of calculations. (2 x 2) (4) 
4.4 With the aid of a graph, explain why marginal cost should be equal to  marginal revenue to maximise profits. (8) 
4.5 Evaluate the effects of implementing maximum prices. (8) [40] 

TOTAL SECTION B: 80 

SECTION C 
Answer any ONE of the two questions from this section in the ANSWER BOOK. Your answer will be assessed as follows: 

QUESTION 5: MICROECONOMICS 40 MARKS – 40 MINUTES 

• Discuss, with the aid of graphs, the individual business in a perfect market under  the following headings: 
  • Derivation of the demand curve (10 marks)
  • Economic profit (8 marks) 
  • Economic loss (8 marks) (26 marks) 
• Evaluate the effect of free entry and exit into the market on the equilibrium  position from short run to long run in a perfect market. (10 marks) [40] 

QUESTION 6: CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 40 MINUTES 

• Explain in detail the characteristics of monopolistic competition. (26 marks) 
• How would competitors in monopolistic competition ensure their operational  success in the market? (10 marks) [40] 

TOTAL SECTION C: 40 
GRAND TOTAL: 150

ECONOMICS
PAPER 2
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

MEMORANDUM 

SECTION A (COMPULSORY)  
QUESTION 1  
1.1 MULTIPLE-CHOICE QUESTIONS  
1.1.1 B ✓✓ equilibrium  
1.1.2 D ✓✓ ceteris paribus  
1.1.3 C ✓✓ average  
1.1.4 B ✓✓ capital  
1.1.5 C ✓✓ oligopoly  
1.1.6 D ✓✓ discrimination  
1.1.7 A ✓✓ collective  
1.1.8 A ✓✓ information being made available (8 x 2) (16)    

1.2 MATCHING ITEMS 
1.2.1 D ✓ intersects AC at lowest point  
1.2.2 G ✓ confirms, amends or sets aside any decision  
1.2.3 A ✓ sometimes exploits consumers  
1.2.4 B ✓ different businesses that produce the same product
1.2.5 F ✓ allows a firm to continue operating  
1.2.6 C ✓ reduction in economic welfare caused by a reduction  in both consumer and producer surplus  
1.2.7 H ✓ a marketing strategy used to create a particular image  in the minds of consumers  
1.2.8 E ✓ interest rate at which the net present value of a  project is zero (8 x 1) (8)  

1.3 GIVE ONE TERM  
1.3.1 Variable costs ✓  
1.3.2 Market ✓  
1.3.3 Inelastic demand ✓ 
1.3.4 Merit goods ✓  
1.3.5 Minimum wage ✓  
1.3.6 Explicit collusion ✓ (6 x 1) (6)   

TOTAL SECTION A: 30 

SECTION B  
Answer any TWO of the three questions from this section in the ANSWER BOOK. 
QUESTION 2: MICROECONOMICS 
2.1 Answer the following questions.  
2.1.1 List TWO forms of labour immobility.  

• Geographic immobility ✓ 
• Occupational immobility ✓ (2) 

 2.1.2 Why would you prefer to run a monopoly rather than a perfect  competitor?  

• A monopoly makes economic profit in both the short and long  run while a perfect competitor makes normal profit in the long  run ✓✓ 
  (Accept any relevant correct response) (2)  

2.2
2.2.1 Give an example of a positive externality.  

• Education ✓ 
• Health ✓ 
  (Accept any other correct relevant example) (1)  

 2.2.2 Complete this statement:  
A positive externality is a reason for …  

• market failures. ✓ (1)  

 2.2.3 Briefly describe private benefits.  

• Private benefits or internal benefits are benefits that accrue to  those who buy the goods and services and those who produce them ✓✓ (2)  

 2.2.4 Explain the reason for the shift from DD to D1D1 in the graph  above.  

• DD shifts to D1D1 because the social benefit has been taken  into account and as a result more is produced. ✓✓ (2)  

 2.2.5 How does the government deal with positive externalities?   The government encourages positive externalities by: 

• Advertising on the radio or television ✓✓ 
• Providing education, health care and other services at low cost  or free to certain groups of people ✓✓ 
• Providing consumer subsidies ✓✓
  (Accept any other correct relevant response.) (2 x 2) (4) 

2.3 DATA RESPONSE  
2.3.1 Give an example of a business in a monopoly.  

• Eskom ✓ 
• Sasol ✓ 
• Transnet ✓ (Accept any correct relevant example) (1)   

 2.3.2 Identify ONE characteristic of the market structure mentioned  in the cartoon above.  

• There is one business – sole provider ✓ 
• It is a price maker – has market power ✓ 
• There is no competition ✓ (1)   

 2.3.3 Briefly describe an artificial monopoly.  

• A monopoly caused by barriers to entry which are not economic in  nature, e.g. patent, etc. ✓✓ 
• It is a monopoly created by law ✓✓ (2)   

2.3.4 Explain a situation where the monopoly has no power.  

• If the demand of the product is very low, then the monopolist will  have no market for the product. ✓✓
  (Accept any correct relevant explanation.) (2)   

 2.3.5 Why is the average revenue curve (AR) of a monopoly  downward sloping?   The average revenue curve (AR) slopes downwards because:

• The AR is the same as the demand curve ✓✓
• At higher prices less is demanded and at lower prices more is  demanded ✓✓ 
• If the monopolist wishes to increase its sales by an additional unit,  it must decrease the price of the product. ✓✓
  (Accept any correct relevant response.) (2 x 2) (4)   

2.4 Explain public goods as a reason for market failure.  

• Public goods are those goods provided to all members of society by the  state including community and collective goods. ✓✓ 
• They are high in demand but are not supplied by the market because of  the low profit gained from them and the high cost of capital needed to  supply them. ✓✓ 
• The reason for the failure of the market to supply public goods lies on the:  - Non- excludability of public goods – consumption by one person  does not exclude use by another, ✓✓ e.g. lighthouse ✓
  • Non-rivalry – consumption cannot be confined to those who pay for  it, ✓✓ free riders can use them ✓ 
  • Non-rejectability – individuals are not able to abstain from  consumption, ✓✓ e.g. streetlighting ✓ 
  • Continuous consumption, ✓✓ e.g. traffic lights ✓ 
  • Social benefits outstrip private benefits, ✓✓ e.g. healthcare and  education ✓
    (Maximum 4 marks for listing and examples). (4 x 2) (8)  

2.5 Justify why a perfect market is unrealistic.   The conditions of perfect competition make it unrealistic because of the  following:  

• Producing a homogeneous product, similar in all respect, cannot excite  consumers ✓ ✓ everyone would like to be different as a result consumers  prefer differentiated products ✓✓ 
• Having perfect knowledge about the behaviour of consumers and other  firms is not really possible ✓✓ because people’s behaviours are subject to  change at any moment ✓✓ 
• Complete freedom of entry and exit is not possible in the real world ✓✓ availability of barriers to entry prohibit perfect competition ✓✓
  (Accept any correct relevant response) (4 x 2) (8)  [40]  

QUESTION 3: CONTEMPORARY ECONOMIC ISSUES 
3.1
3.1.1 List TWO costs considered by economists in calculating profit. 

• Implicit costs ✓ 
• Explicit costs ✓ (2)   

3.1.2 Why are individual firms in a perfect market considered price  takers?  

• There are many small firms in the market such that one firm is  insignificant and has no power to influence the price, then firms  take the price determined by the industry ✓✓ (2)   

3.2 DATA RESPONSE  
 3.2.1 In which market structure are cartels formed?  

• Oligopoly ✓ (1)   

 3.2.2 Which policy does the government use to discourage the  development of monopolies?  

• Anti-monopoly Act / Competition Policy ✓ (1)   

 3.2.3 What will the Competition Commission do with its findings?   

• The Competition Commission will make recommendations to the  Competition Tribunal on the sentence to be given to the  cartel ✓✓ (2)  

 3.2.4 Briefly explain the concept cartel.  

• A group of producers whose goal is to form a collective monopoly  in order to fix prices and limit supply and competition ✓✓ (2)  

 3.2.5 Why is it in the interest of producers to limit the level of  competition in an industry?  
 Producers try to limit level of competition in order to:  

• Make economic profit even in the long run ✓✓ 
• Have a large market share ✓✓ 
• Manipulate the market by selling goods at high prices ✓✓
  (Accept any relevant correct response) (2 x 2) (4) 

3.3 DATA RESPONSE  
 3.3.1 Which market structure do the graphs above represent?

• Perfect market ✓ (1)   

 3.3.2 Give a correct label for curve H in graph 2. (1) 

• Average variable cost / AVC ✓ 

 3.3.3 What effect will an increase in demand have on the market  price?  

• The market price increases ✓✓ (2)   

 3.3.4 Briefly describe the supply curve of an individual firm in this market  structure. 

• It is the rising part of a business’s marginal cost curve above the  minimum of its average cost curve. ✓✓ (2)   

 3.3.5 Why will a business not produce to the left of point ‘g’?   A business will not produce to the left of point ‘g’ because:

• Point g is a shut-down point ✓✓
• At any point to the left of ‘g’ price is less than the average  variable costs (P< AVC) ✓✓ 
• The firm cannot cover its average variable costs ✓✓
  (Accept any relevant correct explanation) (2 x 2) (4)   

3.4 With the aid of a graph, explain why monopolies are considered to be  both productive and allocative inefficient.  

Productive inefficiency  

•  A monopoly firm produces Q1 instead of Q2 which is at the lowest point  on the AC curve (point b) and consumers pay a high price P1 ✓✓ 
• This is because there is no competition in the market as there are  barriers to entry.✓✓ (Max. 2) 

Allocative inefficiency  

• A monopoly firm is allocative inefficient because consumers are paying  a high price P1 which is above MC (point c)/ (the price charged is not  equal to marginal cost) ✓✓ 
• This is because the AR curve is always above the MR curve and at profit  maximising output the price is always above the point where  MR = MC. ✓✓ (Max. 2) (8)    

3.5 Suppose there were ‘price wars’ in an oligopoly market. How will they  affect consumers?  
 If there were price wars, consumers would benefit by:  

• Paying lower prices for individual products ✓✓
• Allowing them power to buy more goods and services ✓✓ 

Consumers may also suffer by:  

• Losing if firms shut down because of severe price wars and there will be  less choice ✓✓ 
• Being exposed to low quality products as the market is less  competitive ✓✓ 
• Rising prices in the long run ✓✓
  (Accept any relevant correct explanation) (8)  [40]  

QUESTION 4: MICROECONOMICS AND CONTEMPORARY ECONOMIC  ISSUES  
4.1
4.1.1 List TWO types of oligopolies as determined by the nature of  the product sold.  

• Pure oligopoly ✓ 
• Differentiated oligopoly ✓ (2)   

 4.1.2 What effect does an increase in taxes on goods have on the  economy?  

• It makes goods to be expensive and many consumers cannot  afford them ✓✓ 
• May lead to poverty ✓✓ 
• The government earns more revenue from taxes ✓✓ 
• Reduce production levels as some businesses may close  down ✓✓
  (Accept any correct relevant response) (2)   

4.2 DATA RESPONSE 
4.2.1 What is the product or service offered by Transnet?   

• Transport services ✓ (1)   

 4.2.2 How much has Transnet lost by not conducting a CBA?   

• R1,212 bn ✓ (1)   

 4.2.3 Briefly describe a cost benefit analysis.  

• An analysis done by the government which weighs the costs  and benefits of a project to determine whether it should be  carried out or not. ✓✓
  (Accept any correct relevant response) (2)   

 4.2.4 Explain a situation where the cost benefit ratio is greater  than 1.  

• The present value of economic benefits will be greater than the  present value of economic costs and the public expenditure will  increase the well-being of a nation. The project should be  considered. ✓✓ 
  (Accept any correct relevant explanation) (2)   

 4.2.5 Why is it necessary for Transnet to conduct a cost benefit  analysis before embarking on the purchase of locomotives?  
 It is important because:  

• Transnet is a parastatal (government institution) and a CBA is  conducted by the government ✓✓ 
• The project of buying locomotives is really big – costs and  benefits should be weighed, and a well-informed decision be  taken ✓✓
  (Accept any correct relevant explanation) (2 x 2) (4)   

4.3 DATA RESPONSE  
 4.3.1 What is the equilibrium quantity level in the oligopoly above? 

• 60 ✓ (1)    

 4.3.2 Which part of the demand curve is relatively price inelastic?  Use labelling provided. 

• BD1 ✓ (1)  

 4.3.3 Briefly describe a duopoly.  

•  A market structure dominated by two firms ✓✓ (2)  

 4.3.4 How will the dominant firm influence the behaviour of small  competitors in the market?  

• The dominant firm will take the lead in raising prices and the  smaller firms will follow and raise their prices ✓✓ (2)  

 4.3.5 Why will the oligopoly not decrease the price from R80 to  R40? Explain by means of calculations.  

• The firm will lose revenue if it decreases the price ✓✓ 
• At a price of R80 there are 60 units sold which yields a revenue  of R4 800 ✓ 
• While a decrease to R40 leads to 65 units sold and revenue of  R2 600 ✓ 
• Loss will be R2 200 ✓✓ (2 x 2) (4)   

4.4 With the aid of a graph, explain why marginal cost should be equal to  marginal revenue to maximise profits.  

 From units 1–3, MR is above MC and the profit of the firm increases ✓✓ The firm should continue to raise production of extra units of output as long  as MR is greater than MC ✓✓ until MC = MR (a point where production is  constant) ✓✓ because producing an extra unit beyond this point creates a  higher marginal cost for the firm than it creates MR ✓✓ For example from units 5–7, MR is less than MC and the profit of the firm is  decreasing ✓✓ At unit 4, MR=MC and it is where the firm maximises its profit ✓✓ (Max. 4) (8)  
4.5 Evaluate the effects of implementing maximum prices.  
Positive effects  
The government sets a maximum price / price ceiling below the market  price, thus:  

• Making goods more affordable ✓✓ 
• Allowing greater access to basic foods, housing and transport ✓✓
• Reducing poverty because the poor will also have access to many  goods ✓✓ 
• Improving the welfare of some consumers ✓✓ 

Negative effects  
The suppliers will not be in favour of the implementation of a maximum  price and this will result to:  

• Decreasing the supply of goods ✓✓ 
• Shortages of goods in the market ✓✓ 
• Development of black markets (illegal markets) where people can obtain  the goods ✓✓
  (Accept any relevant correct response) (8) [40] 

TOTAL SECTION B: 80

SECTION C  
Answer ONE of the two questions from this section in the ANSWER BOOK. 
QUESTION 5 

• Discuss, with the aid of graphs, the individual business in a perfect  market under the following headings: 
  • Derivation of the demand curve (10 marks)
  • Economic profit (8 marks) 
  • Economic loss (8 marks) 
• Evaluate the effect of free entry and exit into the market on the  equilibrium position from short run to long run in a perfect market. 

INTRODUCTION  
A perfect market is a market with a large number of sellers who sell homogeneous  products. ✓✓ 
(Accept any correct relevant response) (2)  

MAIN PART  
Derivation of demand curve of an individual business  

• The sellers are too insignificant to influence the market price, hence they are  price takers ✓✓ 
• Each individual is forced to sell his goods at market price ✓✓
• Firms cannot manipulate the price but the quantities, thus the demand curve is  horizontal / perfectly elastic ✓✓ 
• In the graph above, the firm takes price R3 from the industry as its selling price  and the demand curve is DD ✓

Economic profit  

• A firm makes economic profit when average revenue is greater than average  cost ✓✓ 
• The firm maximises profit at point E where MC=MR ✓✓ 
• AC is below AR at point F and the firm makes economic profit – PCFE ✓✓ (4)    

Economic loss  
  

• A firm makes economic loss when average revenue is less than the average  cost ✓✓ 
• The firm minimises loss at point E where MR=MC ✓✓ 
• AC is above AR at point G and the firm makes an economic loss – PCGE ✓✓ (4)  (26)  

ADDITIONAL PART  
Free entry  

• The economic profit made in the short run attracts new businesses to the  industry ✓✓ 
• The quantity offered on the market increases, as a result of expansion by  existing businesses, supply will increase ✓✓ 
• The price will drop and the firm will make normal profit ✓✓ (Max. 5) 

Free exit  

• The economic loss made in the short run will lead to firm exiting the industry ✓✓
• Less quantity will be offered and supply will decrease ✓✓ 
• The price will increase and the firm will make normal profit ✓✓
  (Accept any other correct relevant response) (Max. 5) (10) 

CONCLUSION 
The perfect market is both productive and allocative efficient and produces at the  lowest of the AC curve, sell the high quantity at the lowest price. ✓✓ (2) [40] 

QUESTION 6: CONTEMPORARY ECONOMIC ISSUES  

• Explain in detail the characteristics of monopolistic competition. 
• How would competitors in monopolistic competition ensure their  operational success in the market?  

INTRODUCTION  
Monopolistic competition is a market structure with a large number of sellers where  entry is relatively easy but the product is differentiated, e.g. toothpaste. ✓✓
(Accept any correct relevant introduction) (2) 

BODY  
MAIN PART: CHARACTERISTICS OF MONOPOLISTIC COMPETITION  
There are a large number of sellers in the market. ✓ 

• There is stiff competition between them. ✓✓ 

Products are differentiated ✓ 

• Products are similar but not identical because they satisfy same consumer need,  e.g. clothing, shoes ✓✓ 
• There may be differences in packaging of a product that makes it different from  other similar products, e.g. sugar ✓✓ 
• Differences may be imaginary, ✓✓ e.g. in the case of medicine where we find  different brand names that contain exactly the same ingredients; here the  service of the sellers will definitely make the difference ✓✓ 

There is free entry and exit to the market ✓ 

• It is easy for new firms to enter and to leave the industry ✓✓ 
• There are no barriers, permits, patents and complicated plant design ✓✓
• It is easy for businesses that wish to leave the industry to recover their capital  expenditure on exit ✓✓ 

Incomplete information ✓ 

• There is lack of complete information for buyers and sellers ✓✓ 

Control over prices ✓ 

• Businesses have little control over the price ✓✓ 
• They do not compete over price but through differentiated products ✓✓ 

Hybrid structure ✓ 

• It is a combination of perfect competition and a monopoly.✓✓ 
• The element of competition stems from the fact that there are many sellers of  differentiated products and that each is relatively small in relation to the market  as a whole ✓✓ 

Often it is local ✓ 

• Monopolistic competition generally occurs in the retail and services sector of  the economy ✓✓ 
  (Accept any other correct relevant characteristic) 
  (Allocate a maximum of 8 marks for headings/listing and examples) (26)

ADDITIONAL PART  
Businesses in the monopolistic competitive market can ensure their operational  success by:  

• Creating opportunities for non-price competition due to factors relating to their  product’s uniqueness compared to those of competitors ✓✓ 
• Attracting more customers by advertising their products, making them more  appealing to customers ✓✓ 
• Packaging their product in an attractive way for customers, making them stand out from those of competitors ✓✓ 
• Providing free deliveries for the convenience of their customers ✓✓
• Extending their working hours ✓✓ 
• Building customer loyalty through product branding ✓✓ 
• Giving out loyalty points to consumers for certain purchases ✓✓
  (Accept any other correct relevant response) 
  (Award a maximum of 2 marks for mere listing and examples) (5 x 2) (10)

CONCLUSION  
It is possible for a monopolistic competitive firm to make economic profit in the short  run only and normal profit in the long run. ✓✓ (2) [40] 

TOTAL SECTION C: 40 
GRAND TOTAL: 150

ECONOMICS
PAPER 1
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

MEMORANDUM 

SECTION A (COMPULSORY)  
QUESTION 1  
1.1 MULTIPLE-CHOICE QUESTIONS  
1.1.1 C – comparative ✓✓  
1.1.2 B – demerit ✓✓  
1.1.3 C– cash reserve requirement ✓✓  
1.1.4 A – decrease taxes ✓✓  
1.1.5 A – International Monetary Fund ✓✓  
1.1.6 D– community ✓✓  
1.1.7 C – decline in mineral exports ✓✓  
1.1.8 D – economic union ✓✓ (8 x 2) (16)    

1.2 MATCHING ITEMS  
1.2.1 E – an increase in the productive capacity of the economy  over a specific period of time ✓  
1.2.2 G– an official in the government department ✓  
1.2.3 F – uses interest rates to influence the levels of  expenditure ✓  
1.2.4 H – progressive tax scales are used ✓  
1.2.5 A – obtained when the effects of irregular events and  seasons are removed from time series data ✓  
1.2.6 I – interaction and interfacing of countries with trade as a  common element ✓  
1.2.7 B – exchange rate system where the value of the currency  is determined by market forces ✓  
1.2.8 C – a situation in the economy when leakages are more  than injections ✓ (8 x 1) (8)  

1.3 GIVE ONE TERM  
1.3.1 Budget ✓  
1.3.2 Revaluation ✓  
1.3.3 Prosperity ✓  
1.3.4 Subsidy ✓  
1.3.5 Special Drawing Rights ✓  
1.3.6 Autonomous consumption ✓ (6 x 1) (6)   

 TOTAL SECTION A: 30 

SECTION B  
Answer any TWO of the three questions in this section in the ANSWER BOOK. 
QUESTION 2: MACROECONOMICS  
2.1
2.1.1 Name TWO demand reasons of international trade.    

• The size of the population ✓ 
• The population ‘s income levels ✓ 
• An increase in wealth / change in the wealth of the  population ✓ 
• Preferences and tastes ✓ 
• The difference in consumption pattern ✓ (Any 2 x 1) (2)   

 2.1.2 Why does the government levy high taxes on demerit  goods?  

• To discourage the consumer from consuming the  product.✓✓
  (Accept any other correct relevant response.) (1 x 2) (2)   

2.2 DATA RESPONSE  
 2.2.1 Which trade policy is referred to in the above cartoon?    

• Free trade ✓ (1)  

 2.2.2 Name any member country of the Mercusor trade bloc.    

• Brazil ✓ 
• Paraguay ✓ 
• Uruguay ✓ 
• Argentina ✓ (1)   

 2.2.3 Describe the term free trade.  

• It is when producers and consumers are free to buy goods  and services anywhere in the world without the  interference of the government. ✓✓
  (Accept any other correct relevant response.) (2)  

 2.2.4 Briefly explain innovation as an argument in favour of  free trade.  
 Free trade increases competition.  
Innovation stimulates:  

• New product development. ✓✓ 
• Improved production methods in goods and services. ✓✓
• (Accept any other correct relevant response) (Any 1x2) (2)  

 2.2.5 How will protection of natural resources favour local  industries?  
 Protection of natural resources will favour local industries by:  

• ensuring that they may continue using natural resources  for survival. ✓✓ 
• ensuring that they have ability to effectively plan, use and  conserve natural resources. ✓✓ 
• E.g the South African government has taken steps to  protect Rooibos tea as a natural resource✓ 
• safeguarding the indigenous knowledge that allows the  hoodia plant to be used for medicinal purposes. ✓✓
  (Accept any other correct relevant response)   (Any 2 x 2) (4)

2.3 DATA RESPONSE  
2.3.1 Name the method used to calculate GVA in the above  table.  

• Production method / GDP (P)✓ (1) 

2.3.2 Name any activity that falls under the tertiary sector.  

• Distribution of goods and services ✓ 
• Wholesale and retail trade, catering and accommodation ✓ 
• Transport, storage and communication ✓ 
• Community, social and personal services ✓ 
• Finance, insurance, real estate and business services ✓
  (Accept any other correct relevant response.) (Any 1x1) (1)  

 2.3.3 Briefly describe the term GVA at constant prices.  

• GDP where the effect of inflation on the nominal GDP has  been taken into account, and the figure has been changed  by deflating the index. ✓✓
  (Accept any other relevant correct response.) (2)  

 2.3.4 Calculate the contribution of the secondary sector (A).  Show all calculations.  

•  (452 326 + 125 377 +138 917) ✓= 716 620 ✓
  Award 1 (ONE) mark for answer only. (2)   

 2.3.5 Highlight the importance of national account aggregates.  

• They indicate the economic activity within a country. ✓✓
• Measure economic growth from one year to the next. ✓✓ 
• Determine the standard of living in a country. ✓✓ 
• Comparing prosperity levels among countries. ✓✓ (2 x 2) (4)  

2.4 Differentiate between endogenous and exogenous reasons.
  Endogenous reasons  

• This is often called the Keynesian view. ✓✓
• The level of economic activity constantly and erratically overshoots  and undershoots the eonomy’s potential growth. ✓✓
• Markets are inherently unstable. ✓✓ 
• Price mechanism fails to coordinate supply and demand. ✓✓
• Most important causes of economic fluctuations are: 
  • Indirect links.✓ 
  • Mismatches ✓ 
• Governments should intervene in the economic processes in order  to smooth the business cycle.✓✓ 
• The bold cyclical movements around it are the actual route  followed by the economy. ✓✓ 
• A business cycle is an inherent feature of a market economy.✓✓  (Any 2 x 2)  

Exogenous reasons  

•  Also referred to as Monetarists. ✓✓ 
• If imbalances develop , the market forces will always bring the  market back to equilibrium. ✓✓ 
• Markets are inherenly stable. ✓✓ 
• Most important causes of economic fluctuations are: 
  • Inappropriate government policies. ✓✓ 
  • Governments should not interfere in the markets. ✓✓. 
• External reasons for business cycles are : 
  • Weather conditions ✓ 
  • Shocks ✓ 
  • Structural changes ✓ 
  • Technological changes ✓ (Any 2 x 2) (8)  (Accept response in tabular form)  

2.5 How will corruption impact negatively on the efficiency of the  government?  
Corruption will impact negatively on the efficiency of the government by:  

• affecting service delivery due to lack of funds and projects remain  unfinished. ✓✓ 
• hampering the smooth running of the country.✓✓ 
• poverty and other socio-economic problems are a direct result of  corruption. ✓✓ 
• leading to different expensive commissions that yield nothing. ✓✓
• resurfacing of an atmosphere of political instability. ✓✓ 
• financial mismanagement which blocks services to be rendered to  deserving citizens.✓✓ 
• corruption will cause less profits.✓✓ 
• misallocation of resources to different departments.✓✓
  (Accept any other correct relevant response.) (8) [40]

QUESTION 3: MACROECONOMICS  
3.1
3.1.1 Give TWO examples of leakages.  

• Imports (M) ✓ 
• Savings (S) ✓ 
• Taxes (taxation) (T) ✓ (Any 2 x 1) (2)   

 3.1.2 What effect will ad valorem tarrifs have on luxury items?    

• It will increase the price of luxury goods ✓✓ because the  tax is added to the price of the good, this will make the  quantity demanded to decrease.✓ ✓
  (Accept any other correct relevant response.) (Any 1 x 2) (2)   

3.2 DATA RESPONSE  
 3.2.1 How long does a Juglar cycle last?  

• 7–11 years ✓ (1)   

 3.2.2 What is the slope of the trendline in the diagram above?    

• Positive slope ✓ (1)   

 3.2.3 Describe the term composite indicator. 

• It is a summary of the various indicator groups into a  single number to benchmark a county’s economic  performance. ✓✓
  (Accept any other correct relevant response.) (2)   

 3.2.4 Explain briefly the government’s aim with business cycle  policies. 

• It is to achieve the best possible growth rates for the  country. ✓✓
  (Accept any other correct relevant response.) (2)   

 3.2.5 How can the length be used in forecasting of business  cycles?  

• Longer cycles show strength which will indicate that the  next cycle will also be strong. ✓✓ 
• With a length of 11 years , it can be predicted that 11  years will pass between successive peaks or troughs for  the economy. ✓✓
• Because the length remains constant , it can be assumed  when forecasting that the next cycle will be of similar  length. ✓✓
  (Accept any other correct relevant response.) (Any 2 x 2) (4)  

3.3 DATA RESPONSE  
 3.3.1 Which body regulates the supply of electricity in South  Africa?  

• National Energy Regulator of South Africa (NERSA) ✓ (1)   

 3.3.2 Name ONE problem that the power utility has been faced  with for years.  

• Corruption ✓
• Financial problems / bankruptcy ✓
  (Accept any other correct relevant response) (Any 1x1) (1)   

 3.3.3 Describe the term parastatal.  

• They are businesses with limited liability operating with the  intention to make profits. ✓✓
  (Accept any other correct relevant response.) (2)   

 3.3.4 Briefly explain ineffectiveness as a characteristic of  public sector failure  

• Refers to the public sector being inadequate and unable to  bring about the desired effects into the economy. ✓✓
• When policies of the public sector do not accomplish their  intended purpose. ✓✓ 
• Incompetence in using monetary and fiscal policy, land use  policy, industrial policy and commercial policy. ✓✓ 
• Missing targets, e.g regarding inflation, growth and  employment. ✓✓
  (Accept any other correct relevant response) (Any 1x2) (2)   

 3.3.5 How can the South African government address the lack  of accountability?  
The South African government can address the lack of  accountability by:  

• appointing individuals who are competent. ✓✓ 
• avoiding corruption and nepotism. ✓✓ 
• concentrating on efficiency when appointing officials. ✓✓ 
• placing individuals according to their qualifications. ✓✓
  (Accept any other correct relevant response) (Any 2 x 2) (4)  

3.4 Discuss goal bound and demand biased as features of the fiscal policy.
Goal bound  

•  Central government by means of the budgetary process of consultation  and persuasion determines economic and social goals (objectives) for  the country. ✓✓ 
• The budget is used to realise these economic and social goals. ✓✓
• The provincial and local governments merely execute the   approved budget. ✓✓ (Any 2 x 2) (4)

Demand biased  

• Fiscal policy is the main policy instrument used in demand-side  policies. ✓✓ 
• The government improves infrastructure to support fiscal policy. ✓✓
• However elements of fiscal policy are also used to realise supply-side  objectives, ✓✓ 
• e.g. when the government uses taxation as an incentive, allows rapid  depreciation of assets and subsidises human resource development.✓   (Any 2 x 2) (8) 

3.5 How can open market transactions be used to smooth out business  cycles?  
 Open market transaction can be used to smooth out business cycles by:  

• Reducing or increasing the supply of money by buying or selling  government securities and treasury bills in the open market to control  money supply. ✔✔ 
• Selling government bonds to banks and other financial institutions. ✔✔ 
• Debiting the bank’s account with the value of the sale and the bank’s  balance with the Reserve Bank to reduce its ability to offer credit. ✔✔ 
• Crediting the bank’s account with the amount of the purchase thus  leaving the bank with enough money to lend borrowers. ✔✔ 
• Using the policy during recession as a strategy of stimulating the  economy. ✔✔ 
  (Accept any other relevant correct answer.) (8) [40] 

QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS  
4.1
4.1.1 Name TWO arguments in favour of privatisation.    

• Greater efficiency ✓ 
• Greater competition ✓ 
• More choices and higher standard of living ✓ 
• Increase in tax revenue ✓ (Any 2 x 1) (2)   

 4.1.2 How will the SARB correct an overvalued rand?    

• Indirect intervention ✓ 
  • if the rand is overvalued, an increase in interest rates invites an inflow of investments, which creates a surplus  on the BOP. ✓✓
    OR 
• Direct intervention ✓ 
  • if the rand is overvalued, the SARB can buy foreign  currency, using its gold foreign reserves to increase the  demand for the foreign currency.✓✓ (Any 1 x 2) (2) 

4.2 DATA RESPONSE  
 4.2.1 Why is gold listed as a separate item on the current account?    

• Main earner of foreign exchange. ✓ 
• Historical importance ✓ (Any 1 x 1) (1)    

 4.2.2 What trend is shown by the current account from 2016 to  2018?  

• Decreasing/declining ✓ (1)    

 4.2.3 Briefly describe the term trade balance. (2)    

• Value of exports minus the value of imports. ✓✓/ It is a  difference between income received for exports and payments  made from imports. ✓✓ (Any 1 x 2) (2)    

 4.2.4 Explain the purpose of the current account.  

• The current account indicates the flow of monies into the  country and out of the country relating to goods and services/  primary income/ current transfers during the period of a  year.✓✓
• It is also an indication whether a country is living within its  means (surplus or deficit). ✓✓
  (Accept any other correct relevant response.) (Any 1x2) (2)   

 4.2.5 How can the government use our currency to improve the  trade balance?  
 The government can use our currency to improve the trade  balance by:  

• devaluing the rand. ✓✓ 
• making our goods cheaper to foreign countries✓✓ 
• promoting exports.✓✓
  (Accept any other relevant response.) (Any 2 x 2) (4)   

4.3
4.3.1 Name ONE example of an indirect tax.  

• VAT ✓ 
• Fuel levy ✓ 
• Sugar tax ✓ 
• Excise duties/sin tax ✓ 
• Import duties/custom duties ✓ (Any 1 x 1) (1)   

 4.3.2 What is the meaning of personal income tax relief?    

• Measures taken by government to reduce the tax burden on  taxpayers.✓ (1)   

 4.3.3 What impact will an increase in the VAT rate have on the  standard of living of the poor?  

• standard of living of the poor will decrease, ✓✓
• an increase in VAT will increase the price of goods and  services. ✓✓ 
• The poor will not be able to afford all goods and services with  the limited income. ✓✓ 
  (Accept any other correct relevant response.) (Any 1x2) (2)   

 4.3.4 Briefly describe the project the government will engage in  with the revenue collected.  

• Infrastructure development ( roads, communication etc.) ✓✓
• Housing for the poor ✓✓ 
• Health facilities and fighting incurable diseases ✓✓ 
• Subsidies for growing industries ✓✓ 
• Funding higher education ✓✓
  (Accept any other correct relevant response)       (Any 1 x 2) (2)  

 4.3.5 How do reduced tax rates contribute to an increased  government revenue?  
 Reduced tax rates contribute to an increased government  revenue by:  

• Encouraging firms to increase their investment which often  leads to an increase in revenue from company taxes. ✓✓ 
• Motivating people to work harder which will result in increased  output. ✓✓ The more people are willing to work, the more tax  revenue will be earned by the government. ✓✓
• Reducing tax evasion and avoidance which often happens  when tax payers feel the tax rate pressure. ✓✓
  (Accept any other correct relevant response) (Any 2 x 2) (4)   

4.4 Briefly explain the measures that can be applied to reduce the deficit  on the balance of payments.  

•  An increase in tax reduces disposable income which decreases  demand in imports.✓✓ 
• Higher interest rates help to decrease spending on imports.✓✓ 
• Exchange control allows central banks to ration foreign exchange.✓✓
• Borrowing money from the IMF.✓✓
• An increase in import tariffs and controls, although SA complies with  WTO policies to decrease its import controls.✓✓
• Substituting imports will reduce imports of goods because goods will  be produced locally.✓✓ 
• Changes in exchange rates, ie depreciation/ devaluation makes  imports expensive and exports cheaper for foreign countries.✓✓ 
  (Accept any other correct relevant responses) 
   (Allocate a maximum of 4 marks for the listing of facts or examples)   (Any 4 x 2) (8)   

4.5 Why is the promotion of employment and prevention of dumping  important to protect developing countries against overseas  competition? 
Promotion of employment is important to protect developing countries  against overseas competition by :  

• restricting foreign goods entering the country✓✓ 
• employing more people as domestic businesses may increase  production. ✓✓ 
• enabling businesses to enter the market.✓✓ 

Prevention of dumping is important to protect developing countries  against overseas competition by :  

• allowing local producers to be able to compete. ✓✓ 
• ensuring competitive prices. ✓✓ 
  (Accept any other correct relevant response.) (8)  [40]  

SECTION C  
QUESTION 5: MACROECONOMICS 

• Discuss the role of the various markets in the circular flow without the  use of a diagram. (26 marks) 
• How does an increase in injections affect the level of equilibrium in  national income? (10 marks)  

INTRODUCTION  

• Markets coordinate economic activities and in the process prices are  determined for goods and services. ✓✓ 
  (Accept any other correct relevant response.)  

MAIN PART  
Factor market ✓ 

• Households are the owners of factors production. ✓✓ 
• They sell the factors of production on the factor markets ✓✓ and are paid rent  for land, wages for labour, interest fo capital and profit for entrepreneur. ✓✓
• The factor market also includes the labour, property and financial markets. ✓✓ 

Financial markets ✓ 

• These markets are NOT directly involved in the production of goods and  services, they are a link between households, firms and other participants. ✓✓
• E.g. insurance companies, banks etc. ✓ 
• The financial market serves those who wish to save and those who wish to  borrow. ✓✓ 

Money market ✓ 

• It is where short term loans and very short term funds are saved and  borrowed by consumers and business enterprises. ✓✓ 
• Banks operate in the money market. ✓✓ 
• The SARB is a key institution in the money market. ✓✓ 
• Bank debentures, treasury bills, government bonds are traded. ✓✓  

Capital market ✓ 

• In the capital market long term funds are borrowed and saved by  consumers and business enterprises. ✓✓ 
• JSE is the key institution in this market. ✓✓ 
• Shares are traded and mortgage bonds. ✓✓ 

Foreign exchange market ✓ 

• In the RSA these transactions take place in our banks.✓✓ 
• Businesses buy foreign currency to pay for imported goods and  services. ✓✓ 
• The SA rand is traded freely in these markets. ✓✓ 
• E.g when a person buys a travellers cheque to travel abroad. ✓ 
• The most important foreign exchange markets are in London,  New York and Tokyo. ✓✓ 

Goods/product market ✓ 

• These are markets for consumer goods and services ✓✓– goods  are defined as any tangible items such as food , clothing and  cars that satisfy some human wants and needs. ✓ 
• Buying and selling of goods that are produced in markets. ✓✓ ∙ E.g durable consumer goods - furniture ✓ 
• Semi-durable consumer goods - tyres ✓ 
• Non-durable consumer goods - beverages ✓ 
• Services are intangible items such as hairdressing, insurance✓✓
• Capital goods market is for trading of buildings and  machinery. ✓✓       (Max. 26) 

ADDITIONAL PART  
How does an increase in injections affect the level of equilibrium in  national income?  

• Increase in injections (in the form of government expenditure, investment  and export earnings ✓) will lead to an increase in the equilibrium level of  national income. ✓✓ 
• Increased injection leads to increased investment, increased demand and  increased employment ✓✓ and this process continues, ✓ 
• This is known as the Keynesian Multiplier. ✓✓ 
• The multiplier effect refers to an initial spending which gives rise to an even  greater increase in national income. ✓✓ 
• A change in the autonomous component of aggregate demand will lead to a  change in the equilibrium output. ✓✓ 
• In other words, the change in output will be even larger than the initial  change in aggregate demand resulting from further increase in  injections. ✓✓ (Max 10) (Accept any correct relevant response.) (10)  

CONCLUSION  

• Markets are critically important institutions in our economic system,  because they regulate supply and demand and safeguard stable prices  and confidence amongst business people. ✓✓
  (Accept any other relevant higher order conclusion.) (2) [40]

QUESTION 6: ECONOMIC PURSUITS 

• Discuss import substitution as part of South Africa’s international  trade policy under the following headings: 
  • Reasons 
  • Advantages 
  • Disadvantages (26 marks)
• How successful have South African policies been to redress income  inequality? (10 marks) 

INTRODUCTION  

• Import substitution is the replacement by domestic production of goods  that were previously imported. ✓✓
  (Accept any correct relevant response.)  

BODY: MAIN PART  
Reasons  
Trade ✓ 

• Developing countries depend on their natural resources as a basis for  economic growth and development. ✓✓
• The demand for such goods , e.g agricultural products is fairly fixed and  inflexible. ✓✓ 
• Such goods have a low income and price elasticity of demand, which means  that substantial changes in prices and income level have no effect on the  demand for them. ✓✓ 

Diverstification ✓ 

• When goods and services that were previously imported are produced  locally, domestic manufacturing grows and the economy becomes less  reliant on foreign countries. ✓✓ 
• Developing countries often find import substitution an easy way to diversify  their economies. ✓✓ 
• A natural starting point is import substitution because there is certainty that  a domestic market exists for their products. ✓✓ 
• The argument of infant industries is used to justify protection measures. ✓✓
• Such industries may have the potential of comparative advantage and when  given protection, may be able to benefit from larger scales of production and  become internationally competitive. ✓✓ 

Balance of payment problems ✓ 

•  If the deficit on the BOP is too high, a reduction in imports can assist to  rectify this. ✓✓ 

Advantages  

• Increased employment: more local workers will be employed. ✓✓
• This will stimulate the economy and the GDP increases. ✓✓ 
• More choices: Available foreign exchange can be used for other imports, thus  increasing choices. ✓✓
• Because goods are no longer imported but locally produced, they will be  bought by domestic consumers. ✓✓ 
• Diversification: the domestic economy become more diversified by producing a  greater variety of goods locally and is less vulnerable to foreign actions and  conditions, ✓✓ e.g price increases of foreign goods ✓and financial turbulances  in the foreign markets. ✓ 

Disadvantages  

• Costly and uneconomical projects are established ✓✓ e.g. Mossgas ✓ 
• Technology borrowed from abroad may be unsuitable for local production. ✓✓ 
• Where comparative advantage exists, competitiveness of certain sectors may  decrease. ✓✓ 
• Import substitution leads to demand for protection ✓ and this demand comes  from industries that provide inputs to local industries. ✓
• There is inefficient local production because local producers are shielded from  foreign competition. ✓✓ 
• Capital and entrepreneurial talent is drawn away from comparative  advantage.✓✓ (Max. 26) 

ADDITIONAL PART 
How successful have South African policies been to redress income  inequality?  

• South Africa uses a progressive income tax system. ✓✓ 
• Those earning higher incomes are taxed at higher rates, and this money is  used to finance social development. ✓✓
• The poor benefit more than the rich. ✓✓ 
• The government also applies wealth taxes, ✓✓ 
• Properties are taxed according to their market values. ✓✓ 
• Low cost housing is exempted from these duties. ✓✓ 
• Transfer duties are paid when properties are bought. ✓✓ 
• Social security payments are given to the vulnerable groups, ✓✓
• E.g. old age pensions and unemployment insurance. ✓ 
• Limited quantities of free electricity and water are also provided.✓✓
  (Accept any other correct relevant response) 
  (Accept any negative responses.) (Max. 10)  

CONCLUSION  

• Import substitution as an inward-looking strategy can best help in the restrictions of  imports in order to allow domestic enterprises the opportunity to grow their  businesses and supply similar products that will grow the economy later. ✓✓ (Accept any other relevant higher order conclusion) (Max. 2) [40] 

TOTAL SECTION C: 40 
GRAND TOTAL: 150

BUSINESS STUDIES
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

INSTRUCTIONS AND INFORMATION 
Read the following instructions carefully before answering the questions.

1. This question paper consists of THREE sections and covers all FOUR main topics.
   SECTION A: COMPULSORY
   SECTION B: Consists of FOUR questions
   Answer any THREE of the four questions in this section.
   SECTION C: Consists of THREE questions
   Answer any TWO of the three questions in this section.
2. Read the instructions for each question carefully and take particular note of what is  required.
3. Number the answers correctly according to the numbering system used in this  question paper. NO marks will be awarded for answers that are numbered  incorrectly.
4. Except where other instructions are given, answers must be in full sentences.
5. Use the mark allocation and nature of each question to determine the length and  depth of an answer.
6. Use the table below as a guide for mark and time allocation when answering each  question. 

   SECTION	QUESTION	MARKS	TIME  (minutes)
   A: Objective-type questions COMPULSORY	1	40	30
   B: FOUR direct/indirect-type  questions  CHOICE:  Answer any THREE.	2	60	30
   	3	60	30
   	4	60	30
   	5	60	30
   C: THREE essay-type  questions  CHOICE:  Answer any TWO.	6	40	30
   	7	40	30
   	8	40	30
   TOTAL		300	180

7. Begin the answer to EACH question on a NEW page, e.g. QUESTION 1 – new  page, QUESTION 2 – new page, etc. 
8. You may use a non-programmable calculator. 
9. Write neatly and legibly.

QUESTIONS

SECTION A (COMPULSORY) 
QUESTION 1 
1.1 Various options are provided as possible answers to the following questions.  Choose the answer and write only the letter (A–D) next to the question number  (1.1.1–1.1.10) in the ANSWER BOOK, for example 1.1.11 D. 
1.1.1 Stella dairy farm takes over Mfundo’s cheese factory, ... integration was  applied. 

1. horizontal 
2. forward
3. backward
4. conglomerate 

1.1.2 This Act makes provision for the establishment of the Commission for  Conciliation, Mediation and Arbitration (CCMA): 

1. Labour Relations Act, 1995 (Act 66 of 1995)
2. Employment Equity Act, 1998 (Act 55 of 1998)
3. National Credit Act, 2005 (Act 34 of 2005)
4. Compensation for Occupational Injuries and Diseases Act, 1997  (Act 61 of 1997) 

1.1.3 The … encourages good quality training in the workplace to ensure on going development of skills. 

1. Labour Relations Plan
2. Skills Development Levy 
3. Human Resources Development Strategy
4. National Skills Development Strategy 

1.1.4 This leadership style encourages employees to work hard because  they will receive rewards: 

1. Situational
2. Charismatic 
3. Transactional
4. Democratic 

1.1.5 Businesses apply this management and leadership theory to change,  develop and motivate employees over a short period of time: 

1. Situational
2. Transformational 
3. Trait 
4. Leaders and followers

1.1.6 This team dynamic theory focuses on FOUR pairs of attitudes  and functions: 

1. Belbin
2. Jungian 
3. MTR-I approach 
4. Margrison-McCann 

1.1.7 Menzi Ltd is not only concerned about their financial position, but  also about their social and environmental successes. Therefore  they report on their ... performance. 

1. profitability 
2. social 
3. Porter's Five Forces 
4. triple bottom line 

1.1.8 Businesses allowing employees to use their own language during  free time, is a way to promote … rights in the workplace. 

1. cultural 
2. social 
3. consumer 
4. economic 

1.1.9 Joseph lost his job at Green Industries, therefore he is entitled to  claim from the … Fund. 

1. Skills Development 
2. Compensation 
3. Unemployment Insurance 
4. Medical Aid 

1.1.10 Inspection of the final product to ensure that it complies with the  required standard: 

1. Quality gap 
2. Quality control 
3. Quality assurance 
4. Quality management  (10 x 2) (20)

1.2 Complete the following statements by using the words provided in the list  below. Write only the word(s) next to the question numbers (1.2.1–1.2.5) in  the ANSWER BOOK. 

1.2.1 Employers pay 1% as a skills development levy if their annual salary  expense exceeds ... 
1.2.2 Lutho inspires his workers to do their best. He is therefore a good … 
1.2.3 A/An … leader ensures that employees follow strict rules and  procedure when performing their tasks. 
1.2.4 The … technique is where a team of experts are given  questionnaires to obtain their opinions without bringing them  together. 
1.2.5 Comparing the actual performance of a financial manager to his/her  expected performance in order to increase his/her salary is called … (5 x 2) (10)
1.3 Choose a description from COLUMN B that matches a term in COLUMN A.  Write only the letter (A–J) next to the question number (1.3.1–1.3.5) in the  ANSWER BOOK, for example 1.3.6 K. 

TOTAL SECTION A: 40

SECTION B 
Answer ANY THREE questions in this section. 
NOTE: Clearly indicate the QUESTION NUMBER of each question that you  choose. The answer to EACH question must start on a NEW page, e.g. QUESTION 2 on a NEW page, QUESTION 3 on a NEW page, etc. 
QUESTION 2: BUSINESS ENVIRONMENTS 
2.1 Name the SIX components of the PESTLE analysis. (6) 
2.2 Identify the consumer right, as stipulated in the Consumer Protection Act  (Act 68 of 2008), which is applicable to EACH of the following policy  statements of Sifiso Traders. 
2.2.1 Customers can object to unwanted promotional e-mails/telesales. (2) 
2.2.2 Customers will receive written notices of amended clauses in their  contracts that may limit their rights. (2) 
2.2.3 Customers will be refunded for faulty products. (2) 
2.2.4 Customers can reject goods that are not the same as the sample  marketed. (2) 
2.3 Explain the advantages of intensive strategies in addressing business  challenges. (4) 
2.4 Read the scenario below and answer the questions that follow.

2.4.1 Name the business sector in which ABC Bank Ltd operates and  motivate your answer. (3) 
2.4.2 Explain the main purpose of the Employment Equity Act (EEA),  1998 (Act 55 of 1998) with specific reference to Busisiwe’s claim  of non-compliance by ABC Bank Ltd with this Act. (6) 
2.4.3 Outline any TWO business actions that can be regarded as  discriminatory by the EEA. (4) 
2.5 Distinguish between BEE and BBBEE. (8)
2.6 Read the scenario below and answer the questions that follow.

2.6.1 Name the Act that is applicable to Khaya's accident at work. (2) 
2.6.2 Quote ONE incident from the scenario where Khaya did not comply  with the Act mentioned in QUESTION 2.6.1. (1) 
2.6.3 Discuss the impact of the Act referred to in QUESTION 2.6.1 on  businesses and employees. (6) 
2.7 Suggest ways in which businesses can comply with the National Credit Act  (NCA), 2005 (Act 34 of 2005). (6) 
2.8 Evaluate the positive impact of the Labour Relations Act (LRA), 1995 (Act  66 of 1995) on businesses. (6) [60]

QUESTION 3: BUSINESS ROLES 
3.1 Name FOUR components of corporate social responsibility (CSR). (4) 
3.2 Identify the problem-solving technique presented in EACH of the following  scenarios. 
3.2.1 Thandi pretends to be sitting with someone when she makes her  own decisions. (2) 
3.2.2 Power Services list positives and negatives for the project of  drilling for oil in the Wild Coast. (2) 
3.2.3 Tamsanqa Cleaning Services explores different ways to modify  their services. (2) 
3.2.4 Mpho gives his employees an opportunity to suggest ideas  randomly which are then written on a chart. (2) 
3.3 Explain how businesses can contribute to the well-being of their  employees. (4) 
3.4 Read the scenario below and answer the questions that follow.

3.4.1 Quote TWO examples of poor corporate governance from the  scenario above. (2) 
3.4.2 Name TWO King Code principles for good corporate governance  that MFS did not apply. (4) 
3.4.3 Advise MFS on how to apply each King Code principle identified  in QUESTION 3.4.2 to improve their corporate governance. (4) 
3.5 Explain the benefits of creative thinking in the workplace. (6)
3.6 Describe the correct procedure to deal with grievances in the workplace. (8)
3.7 Read the statement below and answer the questions that follow. 
The Occupational Health and Safety Act of 1993 provides the right to health  and safety for persons at work with the use of plant and machinery. 
3.7.1 Explain the responsibilities of workers in promoting human health  and safety in the workplace. (4) 
3.7.2 Discuss the roles of health and safety representatives in the  workplace. (8) 
3.7.3 Recommend TWO ways in which businesses can protect the  environment and human health. (4) 
3.8 Suggest ways in which businesses could promote social rights in the  workplace. (4) [60]

QUESTION 4: BUSINESS OPERATIONS 
4.1 Give FOUR examples of fringe benefits in the workplace. (4) 4.2 Outline the purpose of an interview as a human resource activity (6) 4.3 Read the scenario below and answer the questions that follow.

4.3.1 Identify TWO examples of job description and TWO examples of  job specification in the scenario above. 
Use the table below as a guide to answer QUESTION 4.3.1.   (4) 

4.3.2 Name the type of recruitment that HGL used when they advertised  the post. (2) 
4.3.3 Give TWO other sources of the type of recruitment identified in  QUESTION 4.3.2. (2) 
4.3.4 Explain the procedure that HGL should follow to place the new  employee. (6) 
4.4 Elaborate on the implications of the Skills Development Act, 1998 (Act 97  of 1998) for the human resources function. (8)
4.5 Identify the business function that is responsible for the activities in EACH  of the following scenarios. 
4.5.1 The management of Hlompo Guest Lodge uses outdated  information. (2)
4.5.2 Vincent Pro Engineering manufactures products of good quality. (2) 
4.5.3 Nomhle Beauty Salon bought their cosmetics from Exclusive  Beauty Supplies. (2) 
4.5.4 Pule Incorporated is not able to attract and retain skilled workers. (2)
4.6 Discuss the advantages of total client satisfaction for large businesses. (8)
4.7 Differentiate between quality performance and quality management. (8) 
4.8 Suggest ways in which businesses could improve the quality of  performance within the human resource function. (4) [60]

QUESTION 5: MISCELLANEOUS TOPICS 
BUSINESS ENVIRONMENTS 
5.1 Name the type of leave which is applicable in EACH of the following  scenarios. 
5.1.1 During the first six months of employment, Sipho is entitled to one  day of paid leave every 26 days for medical reasons. (2) 
5.1.2 Zimdo is entitled to a minimum of one day leave for every 17 days  worked. (2) 
5.1.3 Ntombi is pregnant and is entitled to at least four consecutive  months of leave. (2) 
5.1.4 Kagiso’s grandfather has passed away. He is entitled to three to  five (3–5) days paid leave per year. (2) 
5.2 Discuss the following of Porter's Five Forces: 
5.2.1 Competitive rivalry/Power of competitors (4)
5.2.2 Power of buyers (4)

BUSINESS VENTURES 
5.3 Read the scenario below and answer the questions that follow.

5.3.1 Identify the leadership style used by Mr Smith in the scenario  above. (2) 
5.3.2 Describe reasons why employees may prefer the leadership style  mentioned in QUESTION 5.3.1. (6) 
5.3.3 Recommend situations in which the leadership style mentioned in  QUESTION 5.3.1, could be applied in the workplace. (6)

BUSINESS ROLES 
5.4 List any FOUR economic rights of employees in the workplace. (4)
5.5 Distinguish between decision-making and problem-solving. (4) 
5.6 Discuss TWO strategies that businesses may use to manage EACH of the  following socio-economic issues: 
5.6.1 Unemployment (4)
5.6.2 HIV/Aids (4)

BUSINESS OPERATIONS 
5.7 Read the scenario below and answer the questions that follow.

5.7.1 Define the term employment contract. (2) 
5.7.2 Outline any THREE possible reasons for terminating an  employment contract by CME. (6) 
5.8 Advise businesses on the importance of quality circles in improving the  quality of their products. (6) [60] 

TOTAL SECTION B: 180

SECTION C 
Answer ANY TWO questions in this section. 
NOTE: Clearly indicate the QUESTION NUMBER of each question that you  choose. The answer to EACH question must start on a NEW page, e.g.  QUESTION 6 on a NEW page, QUESTION 7 on a NEW page, etc. 

QUESTION 6: BUSINESS ENVIRONMENTS (BUSINESS STRATEGIES)

With reference to the scenario above, you are required to: 

• Develop a SWOT analysis for Super Electric Lamps 
• Outline how SEL can handle each weakness and threat identified
• Discuss THREE defensive strategies that can be used by SEL
• Recommend steps in evaluation strategy [40] 

QUESTION 7: BUSINESS ROLES (TEAM PERFORMANCE AND CONFLICT) 
Effective teamwork depends on a group of a diverse people with different  knowledge and skills. Some workers find it difficult to tolerate others which results  in conflict. Business invests in team building programmes to achieve its goals and  objectives. 
As a team development consultant, provide detailed information on the following: 

• Explain FOUR stages of team development 
• Discuss the characteristics of successful teams 
• Describe the causes of conflict that arise in the workplace 
• Advise businesses on how they should handle conflict in the workplace [40]

QUESTION 8: BUSINESS OPERATIONS (QUALITY MANAGEMENT)

With reference to the scenario above: 

• Explain the benefits of a good quality management system
• Discuss how TQM can impact on the reduction of the cost of quality.
• Elaborate on the impact on the business if TQM is poorly implemented.
• Advise businesses on how they can apply the PDCA model/cycle to improve  the quality of their products. [40] 

TOTAL SECTION C: 80 
GRAND TOTAL: 300

BUSINESS STUDIES
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

NOTES TO MARKERS 

1. Candidates’ responses must be in full sentences for SECTIONS B and C.  However, this would depend on the nature of the question. 
2.  A comprehensive marking guideline has been provided but this is by no means  exhaustive. Due consideration should be given to an answer that is correct,  but:  
   • Uses a different expression from that which appears in the marking  guideline 
   • Comes from another source 
   • Original 
   • A different approach is used 
     NOTE: There is only ONE correct answer in SECTION A.
3. Take note of other relevant answers provided by candidates and allocate  marks accordingly. (In cases where the answer is unclear or indicates some  understanding, part-marks should be awarded, for example, one mark instead  of the maximum of two marks.) 
4. The word ‘Submax’ is used to facilitate the allocation of marks within a question  or sub-question. 
5. The purpose of circling marks (guided by ‘max’ in the breakdown of marks) on  the right-hand side is to ensure consistency and accuracy in the marking of  scripts as well as for calculation and moderation purposes. 
6. Subtotals to questions must be written in the right-hand margin. Circle the  subtotals as indicated by the allocation of marks. This must be guided by ‘max’  in the marking guideline. Only the total for each question should appear in the  left-hand margin next to the appropriate question number. 
7.  In an indirect question, the theory as well as the response must be relevant  and related to the question. 
8. Incorrect numbering of answers to questions or sub-questions in SECTIONS A  and B will be severely penalised. Therefore, correct numbering is strongly  recommended in all sections. 
9. No additional credit must be given for repetition of facts. Indicate with an R.   
10. Note that no marks will be awarded for indicating Yes/No in evaluation type  questions requiring substantiation or motivation. (Applicable to SECTIONS B  and C). 
11. The difference between 'evaluate' and 'critically evaluate' can be explained as  follows: 
    11.1 When 'evaluate' is used, candidates are expected to respond in either  a positive/negative manner or take a neutral (positive and negative)  stance, e.g. Positive: ‘COIDA eliminates time and costs spent √ on  lengthy civil court proceedings.’ √ 
    11.2 When ‘critically evaluate’ is used, candidates are expected to respond  in either a positive/negative manner or take a neutral (positive and  negative) stance. In this instance, candidates are also expected to  support their responses with more depth, e.g. 'COIDA eliminates time  and costs spent√ on lengthy civil court proceedings, √ because the  employer will not be liable for compensation to the employee for  injuries sustained during working hours as long as it can be proved  that the business was not negligent.’ √ 
    NOTE:
    1. The above could apply to 'analyse' as well. 
    2.  Note the placing of the tick (√) in the allocation of marks. 
12. The allocation of marks must be informed by the nature of the question,  cognitive verb used, mark allocation in the marking guidelines and the context of  each question. 
    Cognitive verbs, such as: 
    12.1 Advise, name, state, mention, outline, motivate, recommend, suggest,  (list not exhaustive) do not usually require much depth in candidates'  responses. Therefore, the mark allocation for each statement/answer  appears at the end. 
    12.2 Describe, explain, discuss, elaborate, compare, distinguish,  differentiate, justify, devise, analyse, evaluate, critically evaluate (list  not exhaustive) require a greater depth of understanding, application  and reasoning. Therefore, the marks must be allocated more  objectively to ensure that assessing is conducted according to  established norms so that uniformity, consistency and fairness are  achieved. 
13.  Mark only the FIRST answer where candidates offer more than one answer for  SECTION B and C questions that require one answer. 
14. SECTION B 
    14.1 If for example, FIVE facts are required, mark the candidate’s FIRST FIVE  responses and ignore the rest of the responses. Indicate by drawing a  line across the unmarked portion and use the word ‘Cancel’. 
    NOTE: This only applies to questions where the number of facts is   specified. 
     14.2 If two facts are written in one sentence, award the candidate FULL credit.  Point 14.1 above still applies. 
    14.3 If candidates are required to provide their own examples/views,  brainstorm this to come up with alternative answers. 
    14.4 Use of the cognitive verbs and allocation of marks:   
    14.4.1 If the number of facts are specified, questions that require  candidates to 'describe/discuss/explain' may be marked as  follows: 
    • Fact 2 marks (or as indicated in the marking   guideline) 
    • Explanation 1 mark 
      The ʽfact’ and ʽexplanation’ are given separately in the marking  guidelines to facilitate mark allocation. 
      14.4.2 If the number of facts required is not specified, the allocation of  marks must be informed by the nature of the question and the  maximum mark allocated in the marking guideline. 
      14.5 ONE mark may be awarded for answers that are easy to recall,  requires one word answers or is quoted directly from a  scenario/case study. This applies to SECTIONS B and C in particular  (where applicable). 
15. SECTION C
    15.1 The breakdown of the mark allocation for the essays is as follows:    

15.2 Insight consists of the following components:  

NOTE:  

1. No marks will be awarded for contents repeated from the  introduction and conclusion. 
2. The candidate forfeits marks for layout if the words 
   INTRODUCTION and CONCLUSION are not stated. 
3. No marks will be allocated for layout, if the headings 
   ‘INTRODUCTION and CONCLUSION are not supported by an  explanation.    

15.3 Indicate insight in the left-hand margin with a symbol e.g.  (‘L, A, -S and/or O’).  
15.4 The breakdown of marks is indicated at the end of the suggested  answer/ marking guidelines to each question.  
15.5 Mark all relevant facts until the SUBMAX/MAX mark in a subsection  has been attained. Write SUBMAX/MAX after maximum marks have  been obtained.  
15.6 At the end of each essay, indicate the allocation of marks for facts and  marks for insight as follows: (L – Layout, A – Analysis, S – Synthesis,  O – Originality) as in the table below.    

15.7 When awarding marks for facts, take note of the sub-maxima  indicated, especially if candidates do not make use of the same  subheadings. Remember headings and sub-headings are encouraged  and contribute to insight (structuring/logical flow/sequencing) and  indicate clarity of thought.  
(See MARKS BREAKDOWN at the end of each question.)  
15.8 If the candidate identifies/interprets the question INCORRECTLY, then  he/she may still obtain marks for layout.  
15.9 If a different approach is used by candidates, ensure that the answers  are assessed according to the mark allocation/subheadings as  indicated in the memorandum.  
15.10

15.10.1 Award TWO marks for complete sentences. Award ONE  mark for phrases, incomplete sentences and vague  answers.  
15.10.2 With effect from November 2015, the TWO marks will not  necessarily appear at the end of each completed sentence.  
The ticks (√) will be separated and indicated next to each  fact, e.g. ‘Product development is a growth strategy/where  businesses aim to introduce new products√ into existing  markets.’√ 
This will be informed by the nature and context of the  question, as well as the cognitive verb used.  

15.11 With effect from November 2017, the maximum of TWO (2) marks for  facts shown as headings in the marking guideline, will not necessarily  apply to each question. This would also depend on the nature of the  question.  

MEMORANDUM 

SECTION A  
QUESTION 1  
1.1
1.1.1 B √√ 
 1.1.2 A √√ 
 1.1.3 D √√ 
 1.1.4 C √√ 
 1.1.5 B √√ 
 1.1.6 B √√ 
 1.1.7 D √√ 
 1.1.8 A √√ 
 1.1.9 C √√ 
 1.1.10 B √√   (10 x 2) (20)   

1.2
1.2.1 R500 000 √√ 
 1.2.2 leader √√ 
 1.2.3 bureaucratic√√ 
 1.2.4 Delphi √√ 
 1.2.5 performance appraisal √√   (5 x 2) (10)   

1.3
1.3.1 F √√ 
 1.3.2 J √√ 
 1.3.3 E √√ 
 1.3.4 G √√ 
 1.3.5 H √√   (5 x 2) (10)   

TOTAL SECTION A: 40 
BREAKDOWN OF MARKS 

SECTION B  
Mark the FIRST THREE answers only.  
QUESTION 2: BUSINESS ENVIRONMENTS 
2.1 PESTLE analysis model  

• Political √ 
• Economical √ 
• Social √ 
• Technological √ 
• Legal √ 
• Environmental √
  NOTE: Mark the first SIX (6) only.  (6 x 1) (6)  

2.2 Consumer rights  
2.2.1 Right to privacy/confidentiality √√ 
2.2.2 Right to fair/just/reasonable terms/conditions/disclosure √√   
2.2.3 Right to return goods/have goods replaced/claim a refund/fair  value/good quality and safe products √√ 
2.2.4 Right to fair/honest dealings/responsible marketing/promotion √√ (4 x 2) (8)  
2.3 Advantages of intensive strategies  

• Increased market share√ reduces the business's vulnerability to actions  of competitors.√ 
• Increase in sales/income√ and profitability.√ 
• Improved service delivery√ may improve business image.√ 
• Businesses may have more control√ over the prices of  products/services.√ 
• Gain loyal customers√ through effective promotion campaigns.√ 
• Decrease in prices√ may influence customers to buy more products.√
• Regular sales to existing customers√ may increase.√ 
• Eliminate competitors√ and dominate market prices.√ 
• Enables the business to focus on markets/well researched quality  products√ that satisfy the needs of customers.√ 
• Any other relevant answer related to the advantages of intensive  strategies. 
  Max. (4)  

2.4.1 Tertiary sector √ (1)  
Motivation 

• Provide services to the consumers. √√ (2)  

NOTE: Do not award marks for the motivation if the sector is  incorrectly identified.  Max. (3)
2.4.2 Purpose of the EEA  

• This Act states that employees who do the same work (work of equal  value) √ must be paid equally (equal pay). √ 
• No discrimination √ on grounds of gender in the workplace. √ 
• Promotes equal opportunity √ and fair treatment in the workplace. √ 
• Protects employees from victimisation √ if they exercise the rights given  to them by the EEA. √ 
• Provides for employees to refer unresolved disputes √ to the CCMA. √
• Any other relevant answer related to the purpose of the EEA.  Max. (6)  

2.4.3 Discriminatory actions by EEA  

• Not employing a young woman because she will want to have  children. √√ 
• Refusing to employ a person because he/she has strong religious  beliefs/has a disability. √√ 
• Doing HIV testing unless justified by the Labour Court. √√ 
• Denying people access to the workforce based on  gender/race/culture/etc. and treating them unfairly. √√ 
• Any other relevant actions that can be regarded as discriminatory by  EEA. 
  NOTE: Mark the first TWO (2) only.
  (Any 2 x 2) (4)  

2.5 Distinction between BEE and BBBEE  

NOTE:

1. The answer does not have to be in tabular format, but the   distinction must be clear. 
2. Award a maximum of FOUR (4) marks if the distinction is   not clear/Mark either BEE or BBBEE only.  Max. (8)  

2.6.1 Compensation for Occupational Injuries and Diseases Act, 1993 (Act 130  of1993)/Compensation for Occupational Injuries and Diseases Amendment  Act, 1997 (Act 61 of 1997) √√  
NOTE: Also accept COIDA/Compensation for Injuries and Diseases  Act. (2)  
2.6.2 Quotation  

• Khaya was rushed to hospital without reporting the accident. √ 
• Khaya had not been wearing his protective eye goggles despite having  often been advised to do so. √ (1) 
  NOTE: Mark the FIRST answer only.  

2.6.3 Impact of COIDA on employers and employees  
Positives/Advantages  

• Promotes safety √ in the workplace. √ 
• Creates a framework √ for acceptable employment practices/safety  regulations. √ 
• Supply administrative guidelines/mechanisms √ for dealing  with/processing claims. √ 
• Eliminates time and costs spent √ on lengthy civil court proceedings. √
• Employers are protected from financial burden should an accident occur  in the workplace, √ provided that the employer was not negligent.√ 
• Claiming processes √ are relatively simple. √ 
• Makes businesses more socially responsible √ as they cannot just  employ workers at random in dangerous working conditions. √ 
• Workers are treated with dignity and respect √ as businesses view them  as valuable assets and not just as workers. √
• Covers all employees at the workplace, √ if both parties meet all the  necessary safety provisions in the Act. √
• Employees do not contribute √ towards this fund. √ 
• Employees are compensated financially for any injury/disability √ resulting from performing their duties at their workplace. √ 
• In the event of the death of an employee as a result of a work-related  accident/ disease, √ his/her dependent(s) will receive financial  support. √ 
• Employees receive medical assistance √ provided there is no other  medical assistance option. √/Cannot claim medical assistance from the  fund and medical aid 
•  Any compensation to an employee/the family √ is exempt from income  tax. √ 
• Any other relevant answer related to the positive impact/advantages of  COIDA on employers and employees.  

AND/OR  
12 BUSINESS STUDIES (EC/JUNE 2019) 
Negatives/Disadvantages  

• Claiming processes/procedures √ can be time-consuming. √ 
• Processes/Procedures required by this Act may be costly, √ as  paperwork places an extra administrative burden on businesses. √ 
• Employers have to register all their workers/make annual contributions  to COIDA, √ which may result in cash flow problems. √ 
• Employers may be forced to pay heavy penalties, √ if they are found  guilty of negligence/not enforcing safety measures. √ 
• Workers who are temporarily/permanently employed in foreign  countries √ are not covered. √ 
• Domestic/Military workers √ are not covered/may not claim. √ 
• Any other relevant answer related to the negative impact/disadvantages  of COIDA on businesses.  Max. (6)  

2.7 Compliance to NCA  

• Credit providers must be registered with the National Credit  Regulator. √√ 
• Businesses must submit an annual compliance report to the National  Credit Regulator. √√ 
• Conduct affordability assessment to ensure the consumer has the  ability to meet his/her obligation. √√ 
• Conduct a credit check with a registered credit bureau and could also  consult the National Credit Register. √√ 
• Credit providers must have procedures in place to comply with the  provision of the Financial Intelligence Centre Act (FICA). √√
• Verify the identity of clients, report suspicious transactions/train staff on  their obligations in terms of FICA. √√ 
• Any other relevant answer related to ways in which businesses should  comply with the NCA.  Max. (6)  

2.8 Positive impact of the Labour Relations Act (LRA), 1995 (Act 66 of  1995) on businesses  
Positives/Advantages  

• LRA provides for the principles of collective bargaining √ and puts  structures in place with which disputes in the workplace can be  settled. √ 
• Promotes a healthy relationship √ between the employer and  employees. √ 
• Provides specific guidelines for employers √ on correct and fair  disciplinary procedures. √ 
• Employers and employees have guidelines √ regarding correct  and fair dismissal procedures. √ 
• Provides mechanisms √ such as statutory councils/collective  bargaining/CCMA.√ 
• Labour disputes are settled quicker √ and are less expensive. √ 
• Provides protection for employers √ who embark on lawful lock outs. √
• Employers are entitled to compensation from the Labour Court, √
• if they suffered damages as a result of unprotected strikes. √ 
• Workplace forums can add value to businesses √ if it functions  properly. √ 
• Any other relevant answer related to the positive  impact/advantages of LRA on businesses. 
  NOTE: Allocate a maximum of TWO (2) marks if the impact is  only applicable to unions. Max. (6)  

 BREAKDOWN OF MARKS 
QUESTION 3: BUSINESS ROLES  

3.1 Components of Corporate Social Responsibility (CSR)  

• Environment √ 
• Ethical corporate social investment √ 
• Health and safety √ 
• Corporate governance √ 
• Business ethics √ 
• Employment equity √ 
• Supply chain/Distribution channel √ 
• Customers √
• Community √ 
• Any other relevant answer related to the components of CSR.
  NOTE: Mark the first FOUR (4) only.  (4 x 1) (4) 

3.2 Problem-solving techniques  
3.2.1 Empty-chair technique √√ 
3.2.2 Force-field analysis √√ 
3.2.3 SCAMPER √√ 
3.2.4 Brainstorming √√  (4 x 2) (8)  
3.3 Ways in which businesses could contribute to the wellbeing of their  employees  

• Pay fair wages/salaries to the workers √ based on the nature of their  work/the prevailing economic conditions in the market. √
• Working conditions should include safety/medical/canteen  facilities/benefits √ like housing/leave/retirement, √ etc. 
• Pay fair bonuses, √ based on business earnings, as acknowledgement  for hard work and commitment.√ 
• Provide for employees’ participation in decision-making √ that affects  them. √ 
• Provide recreational facilities √ for employees. √ 
• Offer annual physical/medical assessments √ to workers. √ 
• Make trauma debriefing/counselling/assistance available √ to any  employee who requires these services.√ 
• Offer financial assistance √ in the case of any hardship caused by  unexpected medical costs. √ 
• Allow flexible working hours, √ to enhance productivity.√ 
• Offer support programmes for employees infected √ and affected by  HIV/Aids. √
• Make childcare facilities available √ on the premises for working  mothers in the business. √ 
• Start a nutritional programme √ so that employees can enjoy one good  meal per day to keep them in a healthy condition. √
• Give time to staff to get involved in projects they choose √/Allow staff to  use some of the working hours to participate in the projects of their  choice.√
• Encourage employees to stay fit and healthy √ by getting them involved  in health activities to minimise stress/substance abuse/obesity.√ 
• Provide transport for employees √ who work unusually long hours.√
• Establish coaching and mentoring programmes √ for junior employees.√
• Conduct team-building sessions √ to improve employees’ morale.√
• Encourage employees to attend capacity-building workshops/training  programmes √/ staff-development programmes/team-development  programmes. √ 
• Any other relevant recommendations related to ways in which  businesses could contribute to the wellbeing of their employees.  Max. (4)  

3.4
3.4.1 Quotation 

• The local newspaper reported the possibility of liquidation  resulting from the lack of management skills of the directors. √
• The management of MFS denies these allegations. √ 
  NOTE: Mark the first TWO (2) only.   (2 x 1) (2)  

3.4.2 King Code principle  

• Transparency √√ 
• Accountability √√
  NOTE: Mark the first TWO (2) only. (2 x 2) (4)  

 3.4.3 Application of transparency 

• Regular audits should be done to determine the effectiveness of  the business. √√ 
• uditing and other reports must be accurate / available to  shareholders/employees. √√
• Business deals should be conducted openly so that there is no  hint/sign of dishonesty/ corruption. √√ 
• Staffing and other processes should be open and transparent.√√ 
• Employees/Shareholders/Directors should be aware of the  employment policies of the business. √√ 
• Any other relevant application of transparency as a King Code  principle.   Sub-max. (2)    

 Application of accountability 

• There must be regular communication between management  and stakeholders like shareholders. √√ 
• Company should appoint internal and external auditors to audit  financial statements. √√ 
• The board should ensure that the company's ethics are  effectively implemented. √√ 
• Any other relevant application of accountability as a King Code  principle.  Sub-max. (2)  

NOTE: 

1. Award a maximum of TWO (2) marks if application is  based on the examples of poor corporate governance  quoted in QUESTION 3.4.1. 
2.  Award TWO (2) marks for the King Code principle  identified in QUESTION 3.4.2, if the example of poor  corporate governance was not directly quoted but based  on the scenario. 
3. The application in QUESTION 3.4.3 must link to the  correct King Code principle in QUESTION 3.4.2.  (2 x 2) (4)  

3.5 Benefits/Advantages of creative thinking  

• Better/Unique/Unconventional ideas/solutions √ are generated.√ 
• May give the business a competitive advantage √ if unusual/unique  solutions/ ideas/strategies are implemented. √ 
• Complex business problems √ may be solved.√ 
• Productivity increases √ as management/employees may quickly generate  multiple ideas which utilises time and money more effectively.√ 
• Managers/Employees have more confidence √ as they can live up to their  full potential.√ 
• Managers will be better leaders √ as they will be able to handle/manage  change(s) positively and creatively.√ 
• Managers/Employees can develop a completely new outlook, √ which may  be applied to any task(s) they may do.√ 
• Leads to more positive attitudes √ as managers/employees feel that they  have contributed towards problem-solving. √ 
• Improves motivation √ amongst staff members. √ 
• Managers/Employees have a feeling of great accomplishment √ and they  will not resist/obstruct the process once they solved a problem/contributed  towards the success of the business. √ 
• Management/employees may keep up √ with fast changing technology. √ 
• Stimulates initiative from employees/managers, √ as they are continuously  pushed out of their comfort zone. √ 
• Creativity may lead to new inventions √ which improves the general  standard of living.√ 
•  Any other relevant answer related to the advantages of creative thinking in  the workplace.  Max. (6) 

3.6 Procedure for dealing with grievances in the workplace  

• An aggrieved employee must verbally report the incident/grievance to his/her  supervisor/manager, √ who needs to resolve the issue within 3 to 5 working  days. √ 
• Should the employee and supervisor not be able to resolve the grievance, √ the employee may take it to the next level of management. √ 
• The employee may move to a more formal process √ where the grievance  must be lodged in writing/completes a business grievance form. √ 
• He/She must receive a written reply √ in response to the written grievance. √ - A grievance hearing/meeting √ must be held with all relevant parties present. √ 
• Minutes of the meeting must be recorded √ and any resolution passed must  be recorded on the formal grievance form. √ 
• Should the employee not be satisfied, √ then he/she could refer the matter to  the highest level of management. √ 
• Top management should organise a meeting with all relevant parties.  - Minutes of this meeting should be filed/recorded √ and the outcome/decision  must be recorded on the formal grievance form. √ 
• Should the employee still not be satisfied, he/she may refer the matter to the  CCMA, √ who will make a final decision on the matter. √ 
•  Any other relevant answer related to the correct procedure to deal with  grievances in the workplace. 
  NOTE: The procedure may be in any order. Max. (8)  

3.7
3.7.1 Responsibilities of workers in promoting human health and  safety in the workplace  

• Must take care of their own health √ and safety in the  workplace. √ 
• Co-operate and comply with the rules and procedures √ e.g.  wear prescribed safety clothing. √ 
• Report unsafe √ or unhealthy conditions. √ 
• Report accidents √ to the employer by the end of the shift. √ 
• Use prescribed √ safety equipment. √ 
• Take reasonable care√ of their own safety. √ 
• Inform the employer of any illness √ that may affect the ability to  work. √
• Any other relevant answer related to the responsibilities of  employees in protecting the workplace environment.   Max. (4)  

 3.7.2 Roles of the health and safety representative in the workplace 

• Investigate incidents/complaints √ from workers about health  and safety. √ 
• Responsible for checking √ the effectiveness of the business’s  health and safety measures. √ 
• Identify the potential dangers √ in the workplace. √ 
• Initiate/Promote/Maintain/Review measures √ for ensuring the  health and safety of the workers. √ 
• Attend to any formal inquiry/investigation √ into an  accident/health related incident in the workplace. √
• Ensure that protective clothing √ is provided/available to all  workers.√ 
• Ensure that all equipment that is necessary to perform work √ are provided/maintained regularly. √ 
• Promote safety training √ so that employees may avoid potential  dangers/act pro-actively. √ 
• Ensure that dangerous equipment is used √ under the  supervision of trained/qualified workers.√ 
• Ensure that workers’ health and safety is not endangered √ by  hazards resulting from production/processing/  storage/transportation of material/equipment.√ 
• Co-operate with the employer to investigate any  accidents/complaints from the workers √ concerning health and  safety in the workplace. √ 
• Ensure that employers comply √ with COIDA. √ 
• Any other relevant answer related to the roles of health and  safety representatives in the workplace.   Max. (8)  

 3.7.3 Ways in which businesses can protect the environment and  human health  

•  Adhere to laws/regulations so that profits are not generated at  the expense of the environment. √√ 
• Consider pollution/other environmental issues in all business  activities, e.g. safe disposal of waste/dumping of toxic waste, √√ etc. 
•  Become involved in environmental awareness programs. √√ 
• Businesses protects the environment by altering production  techniques in favour of cleaner and greener technologies. √√ 
• Water for human consumption is tested before it is used. √√ 
• Promote nature conservation by looking after natural  resources. √√ 
• Minimise pollution by re-using/reducing/recycling. √√
• Reduce consumption of goods/services which are  environmentally unfriendly. √√ 
• Register/Engage with recognised institutions/bodies that  promote green peace. √√ 
• Ensure that physical working conditions are worker  friendly/safe/adequate/ functional/promoting occupational  health. √√ 
• Maintain/Service machines regularly. √√ 
• Educate people about hygiene/health issues. √√ 
• Encourage employees to do regular health checks. √√ 
• Any other relevant answer related to ways in which businesses  can protect the environment and human health. 
   NOTE: Mark the first TWO (2) only.  (2 x 2) (4)  

3.8 Ways in which businesses could promote social rights in the workplace 

• Business should ensure that employees have access to clean water/social  security. √√ 
• Encourage employees/Provide opportunities for skills training/basic  education. √√ 
• Register workers with UIF to provide adequate protection in the event of  unemployment/illness. √√ 
• Encourage employees to participate in special events, e.g. World Aids  Day. √√ 
• Provide health care services by establishing site clinics to give employees  access to basic medical examinations. √√ 
• Any other relevant answer related to the ways in which businesses could  promote social rights in the workplace. 
  NOTE: Do not accept ways that promote human and/or economic  rights.  Max. (4)  

BREAKDOWN OF MARKS 
QUESTION 4: BUSINESS OPERATIONS 

4.1 Examples of fringe benefits  

• Medical Aid Fund/Health Insurance Fund √ 
• Pension Fund √ 
• Provident Fund √ 
• Funeral benefits √ 
• Car/Travel/Housing/Cellphone/Clothing allowance √ 
• Performance based incentives √ 
• Issuing of bonus shares √ 
• Staff discount/Free or low cost meal/Canteen facilities √ 
• Any other relevant example related to fringe benefits in the workplace. 
  NOTE: Mark the first FOUR (4) only.  (4 x 1) (4)  

4.2 Purpose of the interview  

• To determine a candidate is suitability√ for the job. √ 
• Match the information given by the applicant √ with the requirements of  the job. √ 
• To get more information √ from the applicant. √ 
• Evaluate the personal/skills characteristics √ of the applicant. √ 
• Provides the applicant with the opportunity to find out more about the  job/working conditions/salary √ and the business. √ 
• Any other relevant answer related to the purpose of an interview.  Max. (6)  

4.3 4.3.1  

NOTE: Mark the first TWO (2) of each only.   (2 x 2) (4)    
 4.3.2 External recruitment √√ (2)   
 4.3.3 Sources of external recruitment 

• Electronic media, e.g. radio/TV √ 
• Social media/Social networks/Internet/Business websites √ 
• Recruitment agencies √ 
• Walk-ins √ 
• Head-hunting √ 
• Professional associations √ 
• Networking √ 
• Educational/Training institutions √ 
• Posters/Bill boards just outside the business √ 
• Any other relevant answer related to the sources of external  recruitment. 
  NOTE: Mark the first TWO (2) only.   (2 x 1) (2)   

 4.3.4 Placement procedure  

•  HGL should outline the specific responsibilities of the new  position, √ including the expectations/skills required for this  position.√ 
• Determine the successful candidate’s  strengths/weaknesses/interests/skills √ by subjecting him/her to a  range of psychometric tests.√
• Determine the relationship between the position √ and the  competencies of the new candidate.√
• Any other relevant answer related to the placement procedure.   Max. (6)    

4.4 Implication of the Skills Development Act (SDA) on the Human  Resources function  

• The human resources function should interpret the aims and requirements  of the SDA √ and adapt workplace skills training programmes  accordingly.√ 
• Identify the training needs of the employees √ and provide them with  training opportunities so that they will perform their tasks efficiently.√ 
• Use the National Qualification Framework/NQF √ to assess the skills  levels of employees.√ 
• Interpret/Implement the aims/requirements of the framework √ for the  National Skills Development Strategy.√ 
• Assist managers in identifying skills/training needs √ to help them to  introduce learnerships.√ 
• Businesses should contribute 1% of their salary bill √ to the Skills  Development Levy/SDL.√ 
• Ensure training in the workplace √ is formalised /structured.√ 
• Appoint a full/part time consultant √ as a Skills Development Facilitator.√ 
• Any other relevant answer related to the implications of the Skills  Development Act on the Human Resources function.  Max. (8)  

4.5 Business functions  
 4.5.1 Administrative √√  
 4.5.2 Production √√  
 4.5.3 Purchasing √√  
 4.5.4 Human resources √√   (4 x 2) (8)    
4.6 Advantages of total client satisfaction for large businesses 

• Large businesses use market research √ to measure/monitor customer  satisfaction/ analyse customer needs.√
• Continuously promote √ a positive business image.√ 
• May achieve a state of total customer satisfaction, if they follow sound  business practices √ that incorporate all stakeholders.√ 
• Ensure that cross functional teams understand their core competencies√ and they develop and strengthen them. √
• May keep more customers/Higher customer loyalty √ which makes it  possible to charge higher prices.√ 
• May be able to gain access √ to the global market. √ 
• May lead to increased √ competitiveness/profitability. √
• Any other relevant answer related to the advantages of total client  satisfaction on large businesses. Max. (8)  

4.7 Differences between quality performance and quality management  

NOTE: 

1. The answer does not have to be in tabular format, but  the differences must be clear. 
2. . Award a maximum of FOUR (4) if the difference is not  clear/Mark either quality performance or quality  management.   Max. (8)   

4.8 Ways in which businesses could improve the quality of performance  within the human resource function 

• Appoint right person where his or her abilities, skills and initiative can  benefit the business. √√ 
• Employees are the key element in assuring quality, implementing  processes and systems, building and maintaining standards. √√ 
• On-going training and staff development is of a high standard.√√ 
• Incentivise employees to increase morale and productivity. √√ 
• Employees are positive about the business through motivation and job  satisfaction. √√ 
• Employees stay at the business for a long time due to the  implementation of performance management systems. √√ 
• Adherence to policies to ensure the safety of employees and quality of  the product. √√ 
• Any other relevant answer related to the ways in which businesses  could improve the quality of performance within the human resource  function.  Max. (4)  

BREAKDOWN OF MARKS   

QUESTION 5: MISCELLANEOUS TOPICS  
BUSINESS ENVIRONMENTS  
5.1 BCEA provision for leave  
5.1.1 Sick √√ 
5.1.2 Annual √√ 
5.1.3 Maternity √√ 
 5.1.4 Family responsibility √√   (4 x 2) (8) 
5.2 Porter’s Five Forces  
5.2.1 Competitive rivalry/Power of competitors 

• Competitors are businesses √ selling the same/similar products  or rendering the same/similar services.√ 
• If the competitors have unique products/services √ they have  greater power.√ 
• The business must draw up a competitor's profile of each similar  business in the area√ to determine its strength √/Business  should determine how many competitors there are √ and how  influential they are in the market.√ 
• If a business has many competitors with similar products, √ the  business will have very little power in the market.√
• Some businesses have the necessary resources to start price  wars √ and continue selling at a loss until some/all competitors  leave the market.√ 
• Any other relevant answer related to competitive rivalry as one  of Porter’s Five Force.   Max. (4)  

 5.2.2 Power of buyers  

• Buyers are the final users √ of products/services.√
• Business must assess how easy it is for its buyers/customers √ to drive prices down.√ 
• This will depend on the number of buyers/the importance of  each buyer to the business √ and the cost of switching to other  products.√ 
• A few powerful buyers √ are often able to dictate terms to the  business.√ 
• If customers can do without the business’ products, √ they may  have more power to determine the prices and terms of sale.√ 
• Businesses should conduct market research √ to gather more  information about its buyers.√ 
• Any other relevant answer related to the power of buyers as a  Porter’s Five Force.   Max. (4)

BUSINESS VENTURES  
5.3 Leadership style  
 5.3.1 Laissez-faire/Free reign √√ (2)   
 5.3.2 Reasons to why employees may prefer a laissez-faire  leadership style 

• Employees take decisions, √ especially when they are  experienced within the framework of the business policy.√ 
• Leader delegates authority to subordinates√ and becomes  involved only on request.√ 
• The leader is responsible √ and accountable for the employees’  decisions and actions.√ 
• Employees are left on their own √ with minimal interference. √ 
• This may lead to frustration on the part of employees √ when they lack experience or have not earned the trust of the leader.√ 
• Subordinates are experts √ and know what they want/can take  responsibility for their actions.√ 
• It can be empowering for competent followers √ as they are  completely trusted to do their job.√ 
• Any other relevant answer related to the reasons why  employees may prefer the laissez-faire/free reign leadership  style.   Max. (6)   

 5.3.3 Application of laissez-faire leadership style  

• Subordinates are experts and know what they want/can take  responsibility for their actions. √√ 
• The leader is very busy, and delegation of tasks will increase  productivity. √√ 
• Team members need to improve/develop leadership skills.√√ 
• Suitable when employees are highly experienced and know  more about the task than the leader. √
• Any other relevant answer related to a situation in which laissez faire/free-reign leadership style may be applied in the  workplace.   Max. (6)  

BUSINESS ROLES  
5.4 Economic rights of employees  

• No forced labour √ 
• Free to accept/choose a job √ 
• Fair salaries and wages/Equal pay √
• Fair/Reasonable working hours √ 
• Safe and healthy working conditions √ 
• Right to form/belong to a trade union √ 
• Right to participate in a legal strike √ 
• Any other relevant answer related to the economic rights of employees.  

NOTE: 

1. Mark the first FOUR (4) only.
2. Do not allocate marks for human and/or social rights.  (4 x 1) (4)  

5.5 Differences between decision making and problem solving  

NOTE: 

1. The answer does not have to be in tabular format, but the  distinction must be clear. 
2. If the distinction is not clear, award a maximum of TWO marks/Mark either decision-making or problem-solving  only.  (2)  Max. (4)  

5.6 Strategies that businesses may use to manage the following socio economic issues  
 5.6.1 Unemployment 

• Encourage growth by keeping interest rates low√ for funds  available to start own businesses.√ 
• Encourage entrepreneurship√ that can promote self employment. √ 
• Offer bursaries to the community√ to improve the level of  education. √ 
• Make courses available for entrepreneurs√ to learn business  skills. √ 
• Reduce number of hours worked√ and increase shift work. √
• Train unemployed in the skills√ that are needed. √ 
• Encourage businesses to run training√ and apprentice  programmes. √ 
• Support existing small businesses√ to create more  employment. √ 
• Any other relevant strategy that businesses may use to manage  unemployment as a socio-economic issue. 
   NOTE: Mark the first TWO (2) only.  (2 x 2) (4)    

 5.6.2 HIV/Aids  

• Develop counselling programmes√ for infected/affected  persons/employees. √ 
• Conduct workshops√ on HIV/Aids programmes/campaigns. √ 
• Roll out anti-retroviral (ARV) treatment programmes (ART) √ for  the infected employees. √ 
• Encourage employees√ to join HIV/Aids support groups. √
• Develop strategies√ to deal with stigma and discrimination. √ 
• Participate in the HIV/Aids prevention programmes√ implemented in the community. √ 
• Support√ non-governmental organisational/community based  organisation/NPC HIV/Aids initiatives. √ 
• Any other relevant strategies that businesses may use to  manage HIV/Aids as a socio-economic issue. 
  NOTE: Mark the first TWO (2) only.  (2 x 2) (4)   

BUSINESS OPERATIONS  
 5.7.1 Employment contract 

• It is a legally binding/written √ agreement between the  employer and the employee.√ 
• The employment contract states various terms and  procedures √ etc. regarding his/her conditions of service and  code of conduct.√ 
• Any other relevant definition/explanation of the employment  contract.   Max. (2)    

 5.7.2 Termination of a contract 

• Employee resigns voluntarily. √√ 
• Employer terminates/dismisses the employee due to  misconduct. √√ 
• Employer has no work for the employee any longer/business is  closing down. √√
• Employee reaches the retirement age as stipulated in the  contract. √√ 
• If the employee dies. √√
• By mutual agreement between the employer and employee.√√ 
• Any other relevant answer related to the reasons for  terminating an employment contract.  

 NOTE: 

1. Mark the first THREE (3) only.
2.  Award a maximum of TWO (2) marks for  examples that illustrate the same fact.  (3 x 2) (6)   

5.8 Importance of quality circles in TQM 

• Solve problems related to quality and implement improvements. √√
• Investigate problems and suggest solutions to management. √√ 
• Ensure that there is no duplication of activities/tasks in the  workplace. √√ 
• Make suggestions for improving systems and processes in the  workplace. √√ 
• Improve the quality of products/services/productivity through regular  reviews of quality processes. √√ 
• Monitor/Reinforce strategies to improve the smooth running of a  business’ operations. √√ 
• Reduce costs of redundancy in the long run. √√
• Increase employees’ morale/motivation. √√ 
• Quality circles discuss ways of improving the quality of  work/workmanship. √√ 
• Contribute towards the improvement and development of the  organisation. √√ 
• Reduce costs/wasteful efforts in the long run. √√ 
• Increase the demand for products/services of the business. √√ 
• Create harmony and high performance in the workplace. √√ 
• Build a healthy workplace relationship between the employer and  employee. √√ 
• Improve employees’ loyalty and commitment to the business and its  goals. √√ 
• Improve employees’ communication at all levels of the business. √√
• Develop a positive attitude/sense of involvement in decision making  processes of the services offered. √√ 
• Any other relevant answer related to the importance of quality circles in  TQM.   Max. (6)    

 BREAKDOWN OF MARKS   

SECTION C  
QUESTION 6: BUSINESS ENVIRONMENTS (STRATEGIES)  
6.1 Introduction  

• SWOT analysis is used to identify and evaluate the factors in the  internal and external environment that can influence the business. √
• Businesses must devise strategies to address the identified  challenges.√
• SWOT analysis assesses how a strategy can be best implemented. √
• The aim of strategy evaluation is to determine whether the chosen  strategy will resolve the identified challenge.√ 
• Any other relevant introduction related to applying the SWOT analysis,  defensive strategies and strategy evaluation.  (Any 2 x 1) (2)  

6.2 SWOT analysis    Max. (8)  

6.3 Strategies to handle weakness and threat  

NOTE: 

1. Do not award marks for strategies that are not linked to  the identified threat or weakness.
2. Do not award marks for the weakness/threat. Max. (12)  

6.4 Defensive strategies  
Divestiture √√  

• The business disposes/sells some assets/divisions √ that are no longer  profitable/ productive.√ 
• Businesses may sell off divisions/product lines√ with slow growth  potential.√ 
• The business sells ownership √ by reducing the number of shareholders 
• Unproductive assets are sold √ to pay off debts/reduce operational  costs. √ 
• Process used to withdraw its investment √ in another business.√ 
• Aims at acquiring √ additional capital. √ 
• Any other relevant answer related to divestiture as a defensive strategy. 
  Strategy (2)
  Explanation (4)
  Sub-max. (6) 
  NOTE: Accept divestment/disinvestment/unbundling as an   alternative answer.  

Liquidation √√ 

•  All assets are sold to pay creditors √ due to a lack of capital/cash flow.√
• Selling the entire business √ in order to pay all liabilities/close down the  business.√ 
• Creditors may apply for forced liquidation √ in order to have their claims  settled.√ 
• Companies in financial difficulty may apply for business rescue √ to  avoid liquidation.√ 
• Any other relevant answer related to liquidation as a defensive strategy. 
  Strategy (2) 
  Explanation (4) 
  Sub-max. (6) 

Retrenchment √√ 

• Terminating the employment contracts of employees √ for operational  reasons. √ 
• Decreasing the number of product lines/Closing certain departments √ may result in some workers becoming redundant.√ 
• Any other relevant answer related to retrenchment as a defensive strategy. 
  Strategy (2)
  Explanation (4)
  Sub-max. (6)
  NOTE: Mark the first THREE (3) responses as they may include  incorrect defensive strategies. 
  Strategies (6) 
  Explanation (12) 
  Max. (18)  

6.5 Evaluation strategies  

• Examine the underlying basis of a business strategy. √√ 
• Formulate strategies to meet objectives favourably. √√ 
• Implement strategies using action plans, √√ etc. 
• Look forward and backwards into the implementation process. √√ 
• Compare the expected performance with the actual performance. √√ 
• Measure business performance in order to determine the reasons for  deviations and analyse these reasons. √√ 
• Take corrective action so that deviations may be corrected. √√ 
• Set specific dates for control and follow up. √√ 
• Draw up a table of the advantages and disadvantages of a strategy. √√ 
• Decide on the desired outcome. √√ 
• Consider the impact of the strategic implementation in the internal and  external environments of the business. √√ 
• Any other relevant answer related to the steps in strategy evaluation. 
  NOTE: Accept steps in any order.  Max. (8)  

6.6 Conclusion  

• SWOT analysis requires the combination of quantitative and qualitative  information to improve the business level of planning, policy making and  enhance decision making. √√ 
• SWOT analysis also improves communication and helps to co-ordinate  business operations. √√ 
• Businesses must continuously evaluate the effectiveness of the  implemented strategies. √√ 
• Any other relevant conclusion related to the SWOT analysis, defensive  strategies and strategy evaluation.  (Any 1 x 2) (2)  [40]  

  QUESTION 6: BREAKDOWN OF MARK ALLOCATION 

LASO–For each component:  

• Allocate 2 marks if all requirements are met. 
• Allocate 1 mark if some requirements are met. 
• Allocate 0 marks where requirements are not met at all.  

QUESTION 7: BUSINESS ROLES (TEAM PERFORMANCE AND CONFLICT   MANAGEMENT)  
7.1 Introduction  

• Teamwork refers to a number of people collaborating/working together  effectively in order to reach a common goal. √ 
• Successful teams go through different stages of team development in  order to become successful/effective. √ 
• Managers should be well conversant with the causes of conflict in order to  develop relevant strategies on how to deal with conflict in the workplace.√
• Poor conflict management may lead to team failure or the dissolution of a  team. √ 
• Any other relevant introduction related to team performance and conflict  in the workplace.  (Any 2 x 1) (2)  

7.2 Stages of team development  
Forming stage √√ 

• Individuals gather information/impressions about each other and the  scope of the task/how to approach it. √ 
• This is a comfortable stage to be in. √ 
• People focus on being busy with routines, such as team organisation, e.g.  who does what/when to meet each other, √ etc.
• Any other relevant answer related to the forming stage of team  development. 
• Name (2) 
  Explanation (2) 
  Sub-max. (4)  

Storming stage √√ 

• Teams go through a period of unease/conflict after formation. √
• Different ideas from team members will compete for consideration. √
• Team members open up to each other and confront each other's ideas/  perspectives. √ 
• Tension/Struggle/Arguments occur and upset team members/There may  be power struggles for the position of the team leader. √ 
• In some instances storming can be resolved quickly, in others, the team  never leaves this stage. √ 
• Many teams fail during this stage as they are not focused on their task.√
• This phase can become destructive to the team/will lower motivation if  allowed to get out of control. √ 
• This stage is necessary/important for the growth of the team.√
• Some team members tolerate each other to survive this stage.√ 
• Any other relevant answer related to the storming stage of team  development. 
  Name  (2)
  Explanation (2) 
  Sub-max. (4)  

Norming stage/Settling and reconciliation √√  

• Team members form agreement and consensus. √ 
• Roles and responsibilities are clear and accepted. √ 
• Processes, working style and respect develop. √ 
• Team members have the ambition to work for the success of the team’s  goals. √ 
• Conflict may occur, but commitment and unity are strong. √ 
• Any other relevant answer related to the norming/settling and  reconciliation stage of team development. 
  Name  (2)
  Explanation (2) 
  Sub-max. (4)  

Performing stage/Working as a team towards a goal √√ 

• Team members are aware of strategies/aims of the team. √ 
• They have direction without interference from the leader. √ 
• Processes and structures are set. √ 
• Leaders delegate and oversee the processes and procedures.√
• All members are now competent, autonomous and able to handle the  decision-making process without supervision. √ 
• Differences among members are appreciated and used to enhance the  team's performance. √ 
• Any other relevant answer related to the performing/working as a team  towards a goal stage of team development. 
  Name (2) 
  Explanation (2) 
  Sub-max. (4)  

Adjourning/Mourning stage √√ 

• he focus is on the completion of the task/ending the project. √
• Breaking up the team may be traumatic as team members may find it  difficult to perform as individuals once again. √ 
• All tasks need to be completed before the team finally dissolves. √
• Any other relevant answer related to the adjourning/mourning stage of  team development. 
  Name  (2)
  Explanation (2) 
  Sub-max. (4)  

NOTE: Mark the first FOUR (4) stages only.  
 Identification (8)  
Explanation (8) 
Max. (16)  
7.3 The characteristics of successful teams  

• Successful teams share a common goal √ as team members are part of  the process of setting goals for the group. √ 
• Share a set of team values √ and implement group decisions. √ 
• Teams value the contributions of individual members√ and reach  consensus on differences. √ 
• There is a climate of respect/trust √ and honesty. √ 
• Team members enjoy open communication√ and deal immediately with  conflict. √ 
• Teams are accountable √ and members know the time frame for  achieving their goals.√ 
• Teams pay attention to the needs √ of the individual team members. √
• Successful teams have sound √ intra-team relations. √ 
• Creates opportunities where team members can develop, √ so that they  learn from the experience of working in a team. √ 
• Regular reviews of team processes and progress√ may help to  detect/solve problems sooner. √ 
• Balance the necessary skills/knowledge/experience/expertise √ to  achieve team objectives. √ 
• Any other relevant answer related to the characteristics of successful  teams.  Max. (10) 

7.4. Causes of conflict in the workplace  

• Lack of proper communication √ between management and workers.√
• Ignoring of rules/procedures √ may result in disagreements and  conflict.√ 
• Management and/or workers √ may have different personalities/  backgrounds. √ 
• Different values/levels of knowledge/skills/experience √ of  managers/workers. √ 
• Little/no co-operation √ between internal and/or external  parties/stakeholders. √ 
• Lack of recognition for good work, √ e.g. a manager may not show  appreciation for extra hours worked to meet deadlines.√ 
• Lack of employee development √ may increase frustration levels as  workers may repeat errors due to a lack of knowledge/skills.√ 
• Unfair disciplinary procedures, √ e.g. favouritism/nepotism.√ 
• Little/no support from management √ with regard to supplying the  necessary resources.√ 
• Leadership styles used, √ e.g. autocratic managers may not consider  workers’ inputs. √ 
• Unrealistic deadlines/Heavy workloads √ lead to stress resulting in  conflict.√ 
• Lack of agreement on mutual matters, √ e.g. remuneration/working  hours. √ 
• Unhealthy competition/Inter-team rivalry √ may cause workers to lose  focus on team targets. √ 
• Lack of commitment √ which may lead to an inability to meet pre-set  targets. √ 
• Any other relevant answer related to the causes of conflict in the  workplace.  Max. (10)  

7.5 Handling of conflict in the workplace  

• Acknowledge that there is conflict in the workplace. √√
• Identify the causes of the conflict. √√ 
• Pre-negotiations may be arranged where workers/complainants will be  allowed to state their case/views separately. √√ 
• A place and time is arranged for negotiations where all employees  involved are present. √√ 
• Arrange a meeting between conflicting employers/employees. √√
• Make the intentions of the intervention clear so that parties involved may  feel at ease. √√ 
• Each party has the opportunity to express his/her own opinions/feelings/  Conflicting parties may recognise that their views are different. √√ 
• Analyse the cause(s) of conflict by breaking it down into different  parts/Evaluate the situation objectively. √√ 
• Blame-shifting should be avoided and a joint effort should be made. √√
• Direct conflicting parties towards finding/focusing on solutions. √√
• Devise/Brainstorm possible ways of resolving the conflict. √√ 
• Conflicting parties agree on criteria to evaluate the alternatives. √√
• The best possible solution(s) is/are selected and implemented. √√ 
• Parties must agree to the best solutions. √√ 
• Evaluate/Follow up on the implementation of the solution(s). √√ 
• Monitor progress to ensure that the conflict has been resolved. √√
• Expertise on handling conflict may be sourced from outside the  business. √√
• Any other relevant answer related to how businesses should handle  conflict in the workplace.  Max. (10)    

7.6 Conclusion  

• The success of a business depends on the successful collaboration  within a team to ensure that the objectives of the business will be  met. √√ 
• Conflict cannot always be resolved/avoided/eliminated, therefore people  need to learn how to manage conflict within a team in order to work in  harmony. √√ 
• Any other relevant conclusion related to team performance and conflict  management.  (Any 1 x 2) (2)  [40]  

QUESTION 7: BREAKDOWN OF MARK ALLOCATION  

LASO–For each component:  

• Allocate 2 marks if all requirements are met. 
• Allocate 1 mark if some requirements are met. 
• Allocate 0 marks where requirements are not met at all.  

QUESTION 8: BUSINESS OPERATIONS (QUALITY MANAGEMENT) 
8.1 Introduction  

• Quality management should not just be an inspection process, but must  become part of the culture of the business. √ 
• TQM is an integrated system and methodology applied throughout the  business to design, produce and provide quality products/quality service  to customers. √ 
• Total quality relates to products that totally satisfy customers’ needs and  expectations in every aspect on a continuous basis. √ 
• Everyone employed in a business has a role to play in ensuring that the  needs of customers are satisfied.√ 
• Any other relevant introduction related to a quality management system.  (Any 2 x 1) (2)  

8.2 The benefits of a good quality management system  

• Effective customer services are rendered, √ resulting in increased  customer satisfaction. √ 
• Time and resources √ are used efficiently. √ 
• Productivity increases √ through proper time management/using high  quality resources. √ 
• Products/Services are constantly improved √ resulting in increased  levels of customer satisfaction. √ 
• Vision/Mission/Business goals √ may be easily achieved. √ 
• Business has a competitive advantage √ over its competitors. √ 
• Regular training will continuously improve √ the quality of employees'  skills/knowledge. √ 
• Employers and employees will have a healthy working relationship √ resulting in happy/productive workers. √
• Increased market share √ and profitability. √ 
• Any other relevant answer related to the benefits of good quality  management systems.  Max. (10)  

8.3 Reduction of cost of quality through TQM  

• Introduce quality circles/small teams of five to ten employees, √ who  meet regularly to discuss ways of improving the quality of their work.√
• Schedule activities to eliminate √ duplication of tasks/activities.√ 
• Share responsibility for quality output√ between management and  workers. √ 
• Train employees at all levels, √ so that everyone understands their role  in quality management. √ 
• Develop work systems that empower employees√ to find new ways of  improving quality. √ 
• Work closely with suppliers √ to improve the quality of raw  materials/inputs. √ 
• Improve communication about the quality challenges/deviations, √ so  that everyone can learn from past experiences. √ 
• Reduce investment √ on expensive, but ineffective inspection  procedures in the production process.√ 
• Implement pro-active maintenance programmes for  equipment/machinery √ to reduce/eliminate breakdowns. √ 
• Any other relevant answer related to ways in which a business can  reduce the cost of quality through TQM.  Max. (10)  

8.4 Impact on business if TQM is poorly implemented  

• Lack of training/skills development √ may lead to poor quality  products. √ 
• Decline in sales, √ as returns from unhappy customer's increase. √
• Decline in productivity, √ because of stoppages. √ 
• Investors could withdraw their investment, √ if there is a decline in  profits. √ 
• Bad publicity √ due to poor quality products supplied. √ 
• High staff turnover √, because of poor skills development. √ 
• Unrealistic deadlines √ may not be achieved. √ 
• Businesses may not be able to make/afford the necessary changes √ that will satisfy customers’ needs. √ 
• Loss of customers √ may lead to bankruptcy/closure.√ 
• Undocumented quality control systems/processes√ could result in  error/deviations from pre-set quality standards. √ 
• Any other relevant answer related to the negative impact on businesses  if TQM is poorly implemented.  Max. (12)  

8.5 Application of PDCA model/cycle in improving the quality of products  
Plan  

• Businesses should identify the problem and develop a plan for  improvement to processes and systems. √√ 
• Answer questions such as ʽWhat to do’/ ʽHow to do it’. √√ 
• Plan the new method and approach in order to improve the quality of  their products. √√  Sub-max. (4)  

 Do  

• Businesses should implement the change on a small scale. √√ 
• Implement the processes and systems as planned. √√ Sub-max. (4)  

Check/Analyse  

• Use data to analyse the results of change. √√ 
•  Determine whether it made a difference and what needs to be  improved. √√
• Check whether the processes are working effectively. √√ 
• Businesses should assess/test and establish if it is working/if things are  going according to plan. √√  Sub-max. (4)  

 Act as needed  

• Implement the improvement to meet the needs of the business. √√
• Devise strategies on how to continually improve. √√ 
• If the change was successful, implement it on a wider scale. √√ 
•  Businesses should continuously revise the process until they get it right  the first time.√√ 
•  Any other relevant answer related to how businesses can apply the  PDCA model/cycle to improve the quality of their products.  Sub-max. (4)    

NOTE: 

1. The steps could be integrated in the application. 
2.  Award a maximum of THREE (3) marks for only   mentioning the steps of the PDCA model.  Max. (14)  

8.6 Conclusion  

• Businesses should put good quality management systems in place in  order to remain sustainable and competitive in the market place. √√
• Businesses that implement the PDCA model have a competitive  advantage that keep abreast with the latest developments in the  market.√√
• Any other relevant conclusion related to the Total Quality Management.  (Any 1 x 2) (2)  [40]  

QUESTION 8: BREAKDOWN OF MARK ALLOCATION  

LASO – For each component:  

• Allocate 2 marks if all requirements are met. 
• Allocate 1 mark if some requirements are met. 
• Allocate 0 marks where requirements are not met at all.  

TOTAL SECTION C: 80  
GRAND TOTAL: 300 

ACCOUNTING
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

INSTRUCTIONS AND INFORMATION 
Read the instructions carefully and follow them precisely. 

1. Answer ALL the questions.
2. A special ANSWER BOOK is provided in which to answer ALL the questions.
3. Show ALL workings to earn part-marks.
4. You may use a non-programmable calculator.
5. You may use a dark pencil or black/blue ink to answer the questions. 
6. Where applicable, show all calculations to ONE decimal place.
7. Write neatly and legibly.
8. Use the information in the table below as a guide when answering the question  paper. Try NOT to deviate from it. 

QUESTION 2: 45 marks; 30 minutes 

QUESTION 3: 50 marks; 30 minutes 

QUESTION 4: 70 marks; 40 minutes 

QUESTION 5: 55 marks; 30 minutes 

QUESTION 6: 40 marks; 25 minutes

QUESTIONS 

QUESTION 1: INVENTORY VALUATION (40 marks; 25 minutes) 1.1 CONCEPTS 
REQUIRED: 
Indicate whether the following statements are TRUE or FALSE: 
1.1.1 When goods are sold, the cost of sales is recorded at the same time  under the perpetual stock system. (1) 
1.1.2 The specific identification method of stock valuation is based on the  assumption that certain stock is identified to be sold first. (1) 
1.1.3 Goods bought are debited to the Purchases Account under the periodic  stock system. (1) 
1.1.4 The weighted-average method of stock valuation is based on the  assumption that the value of opening and closing stock are added up,  and divided by the number of units bought. (1) 

1.2 INVENTORY VALUATION 
Zenko’s Shop sells one type of suitcase. You are provided with information for  the financial year ended on 30 April 2019.  
The business uses the FIFO method for stock valuation and the periodic stock  system. 
REQUIRED: 
1.2.1 Calculate the value of the closing stock on 30 April 2019. (8)
1.2.2 Calculate the following for the year ended 30 April 2019: 

• Cost of sales (8)
• Gross profit % (4)
• Stock holding period for 2019 in days (5) 

1.2.3 Comment on the stock holding period for 2019. Quote figures. (The stock holding period for 2018 was 182 days.) (4) 
1.2.4 In order to improve on stock losses (20 suitcases) the previous year, the owner introduced stricter control measures over stock. Comment on whether it was successful. Show calculations. (7)
INFORMATION: 
Stock records of suitcases: Date Number of units 

Purchases of suitcases: 

Return of suitcases: 

• Ten (10) suitcases purchased during February 2019 were damaged and  therefore returned to the supplier. The supplier agreed and credited the  business account with the cost price including the carriage on purchases. 

Sales 

• 640 suitcases were sold during the year for R576 000.  

QUESTION 2: RECONCILIATIONS (45 marks; 30 minutes)
2.1 BANK RECONCILIATION  
You are provided with information from the books of Qumbu Traders. 
REQUIRED: 
2.1.1 Calculate the correct balance of the Bank Account on 31 January 2019. (15)
2.1.2 Prepare the Bank Reconciliation Statement on 31 January 2019. (11) 
2.1.3 An internal investigation revealed that cash deposits are not made immediately.  Quote and explain TWO examples which led to this finding. (4) 
2.1.4 Provide TWO internal control measures that the business can use to  prevent this from happening again. (4) 

INFORMATION: 
A. Extract from the Bank Reconciliation Statement on 31 December 2018: 

• Outstanding deposits
  15 November 2018             R 4 100
  31 December 2018             R 3 600
• Cheques not yet presented for payment:
  No. 673              R 1 080
  No. 681              R 2 860
  No. 707              R 3 900
  No. 723              R 1 000
• Cheque no. 673 was issued on 21 July 2018 as a donation.
• Cheques no. 681 and no. 707 were reflected on the Bank Statement for  January 2019. 

B. The Bank Account in the General Ledger on 31 December 2018 reflected a  favourable balance of R24 740. 
C. Provisional totals for January 2019:

D. Items reflected in the Journals for January 2019, but not on the Bank  Statement: 

• The following cheques: 
  • No. 782 for R5 400 
  • No. 805 for R1 560, dated 8 February 2019 
  • No. 808 for R5 400 

NOTE: Cheque no. 782, dated 21 January 2019, issued for  stationery was lost. Payment of this cheque was stopped.  The cheque was replaced by cheque No. 808 on 30 January 2019. 

•  Cheque no. 790 was issued for trading stock purchased. The amount was  recorded as R1 850 in the Cash Journal, but the correct amount of  R1 580 was recorded in the Bank Statement. 
• A deposit made by Qumbu Traders on 31 January 2019, R6 800.

E Items on the January Bank statement, but not in the Cash journals: 

• A deposit of R3 600 on 12 January 2019 
• Bank charges, R1 560
  NOTE: Bank charges were overcharged by R160.
  The bank will rectify the error in the next bank statement.
• Interest on credit balance, R500.
• A dishonoured cheque originally received from a debtor, R3 500. 
• A direct deposit by a debtor, in settlement of his account of R1 500 after  10% discount was allowed.
• A debit order for instalment of the owner’s personal insurance,  R2 100. 

2.2 DEBTOR’S RECONCILIATION 
REQUIRED: 
Draw up a reconciled Debtor’s List on 31 March 2019: (11)
INFORMATION: 
The following errors were found: 

• An allowance of R300 for damaged goods returned by H. James was posted  to the account of H. Jameson. 
• An invoice issued to A. Dyantyi for R1 200 was entered correctly in the journal,  but posted to her account as R2 100. 
• R20 interest charge on the overdue account of E. Rasmeni, was posted to  the wrong side of his account. 

QUESTION 3: INCOME STATEMENT (50 marks; 30 minutes) 
You are provided with information extracted from the records of BigSave Ltd,  on 30 April 2019. 
REQUIRED: 
Prepare the Income Statement for the year ending 30 April 2019. (50)
INFORMATION: 
A. EXTRACT FROM THE PRE-ADJUSTMENT TRIAL BALANCE ON  30 APRIL 2019 

B. ADJUSTMENTS AND ADDITIONAL INFORMATION: 

1. Goods are sold at a mark-up of 40% on cost price. 
2.  An allowance for stock totally damaged was granted by the business. The  value of the stock according to the original invoice received, R12 000. 
3. On 30 April 2019, R2 880 was received from A. Kwaza, whose account had  previously been written off as irrecoverable. The amount was entered as  Bad debts in the CRJ. 
4. The provision for bad debts must be adjusted to 5% of outstanding debts. 
5. The company has 3 directors, each earning R44 600 per month. The third  director was only appointed on 1 November 2018.
6. The following were reflected during a physical stock count on  30 April 2019: 
   • Trading stock, R1 847 800 
   • Consumable stores, R600
7. Depreciation for the year amounted to R243 840.
8. An amount of R5 600 was paid too much in auditing fees. 
9. An employee was omitted from the salaries journal. He has not been paid.  His details are as follows:

   Deductions	Employer’s contribution	Net salary
   R5 250	R4 410	15 750

10. The tenant is two months’ arrears with the rent. The monthly rent was  decreased by R1 000 on 1 January 2019.
11. Net profit after tax amounts to 5% on sales.
12. Income tax is calculated at 28% of the net profit. 

QUESTION 4: COMPANY FINANCIAL STATEMENTS (70 marks; 40 minutes)
4.1 BALANCE SHEET AND NOTES 
Refer to the information from the records of RADABA LTD for the financial year  ended 28 February 2019. 
REQUIRED: 
4.1.1 Prepare the following notes to the Balance Sheet: 

• Ordinary share capital (9)
• Retained income (11)
• Trade and other receivables (7) 

4.1.2 Complete the Statement of Financial Position (Balance Sheet) on  28 February 2019. Where notes are not required, show ALL workings  in brackets. (26) 
INFORMATION: 
A. Amounts extracted from the financial records of RADABA LTD: 

B. Share capital 

• The business has an authorised share capital of 800 000 shares. 
• On 1 April 2018, the directors decided to repurchase shares at a total  cost of R1 170 000. The shares were bought at R1,70 above the  average price of R10 per share. 
•  further 120 000 shares were issued on 31 October 2018 at R13 per  share.

C. On 27 February 2019, a final dividend of 30 cents per share was declared.   Shares repurchased do not qualify for final dividends. 
D. A certain portion of the fixed deposit matures in the next 3 months, after  which the remaining balance will be R800 000. 
E. Interest capitalised, R122 100, is reflected on the loan statement  received. This was not recorded in the books. The business expects  to decrease the loan by R169 200 in the next financial year. 
F. After all the above adjustments were taken into account the net profit before tax was calculated to be R1 741 500 and the income tax  payable for the year R522 450. 

4.2 ANALYSIS AND INTERPRETATION OF FINANCIAL INDICATORS 
REQUIRED: 
Use the financial indicators of QUICKFIX LTD given below, to answer the  following questions. 
4.2.1 The company issued additional shares at R9. In your opinion, do you  think the existing shareholders would be happy with the issue price?  Quote ONE financial indicator with actual figure/percentage/ratio to  support your statement. (3) 
4.2.2 The directors feel that the shareholders should be satisfied with the  performance of the company. Explain and quote TWO financial indicators  with actual figures/ratios/percentages to support their opinion. (6) 
4.2.3 The directors decided to increase the loan during the current financial  year. Quote TWO financial indicators (actual figures/ratios/percentages)  that are relevant to their decision. Explain why this was a good decision,  or not. (8) The following financial indicators were calculated for the past two years: 

QUESTION 5: AUDIT REPORT (55 marks; 30 minutes)
5.1 The information relates to Liam Ltd for the financial year ended 30 June 2018
REQUIRED: 
5.1.1 Prepare the note for CASH GENERATED FROM OPERATIONS. (19)
5.1.2 Complete the cash flow statement. (23)
INFORMATION: 
A. Information from the Statement of comprehensive income 
(Income statement) for the year ended 30 June 2018. 

B. Information from the Statement of financial position (Balance sheet) 

1. Trade and other receivables 

2. Trade and other payables

C. Share capital. 

• Received R440 000 for 40 000 additional shares issued on  

31 October 2017.  

• On 30 May 2018 R250 000 was paid for the re-purchase of shares. 

D. Dividends 

•  An interim dividend of R77 000 was paid on 5 January 2018. 
• A final dividend was declared on 29 June 2018. 

E. Fixed Assets 

• The following changes to buildings were made during  the year:
  Extensions of R566 600
  Repairs to the old building, R150 000
• Old equipment, carrying value R35 250, was sold at a loss  of R5 250. 

5.2 AUDIT REPORT 
The following is an extract from the audit report issued by the external auditors of  VOVO Ltd. 
REQUIRED: 
5.2.1 What type of report did VOVO Ltd receive? Explain. (3) 
5.2.2 The Companies Act requires public companies to be audited.  Provide a reason for this. (2) 
5.2.3 Explain ONE major consequence for Makaya&Ntini should they be  negligent in performing their duties. (2) 
5.2.4 Name ONE other party, other than the shareholders, that would be  interested in this audit opinion and give a reason for their interest. (2) 
5.2.5 Briefly indicate how this audit report would possibly affect the shares of  VOVO Ltd on the Johannesburg Securities Exchange (JSE).  Mention TWO points. (4)
INFORMATION: 
Audit opinion – to the shareholders 

QUESTION 6: RECONCILIATION AND VAT (40 marks; 25 minutes)
6.1 FIXED ASSETS 
You are provided with the incomplete fixed asset note of Komani Ltd.  
The financial year ended 31 December 2018. 
REQUIRED: 
6.1.1 Calculate the missing figures indicated by A to E in the incomplete Fixed  Asset Note. (7) 
6.1.2 Prepare the Asset Disposal Account for the office furniture sold. (10) 
6.1.3 Comment on the sale of land to the husband of the CEO. 
See information B. (2)

INFORMATION: 
A. INCOMPLETE FIXED ASSET NOTE 

B. Land not used was sold for cash to a local business man for R200 000.  The business belongs to the husband of the company’s CEO. 
C. Old office furniture was offered for sale (see fixed asset register below).  The local recreational club offered to pay R10 000 in cash. The offer was  accepted on 30 September 2018 and the rest was regarded as a donation  by the business. 

D. A new vehicle was purchased on 31 December 2018 for R300 000 less  10% trading discount. 

• Depreciation on vehicles is written off at 15% p.a. on the diminishing   balance method. 

6.2 VAT CALCULATIONS 
The information below relates to Nobs Traders for the VAT period ended  28 February 2019.  
REQUIRED: 
Calculate the amount of VAT payable to/receivable from SARS on 28 February  2019. Indicate whether the amount is payable or receivable. (13) 
INFORMATION: 
A. Amount owed to SARS on 1 February 2019, R49 800. 
B. Transactions for the period ended 28 February 2019: 

6.3 VAT AND ETHICS 
REQUIRED: 
Read the given information and answer the questions that follow. 
6.3.1 Why should Rantsi Traders produce a proof of sales? (2)
6.3.2 How would this affect the VAT returns of Rantsi Traders? (2) 
6.3.3 Advise Rantsi traders of the implications, should he agree to this  request. Mention TWO points. (4) 

INFORMATION: 
A customer requested Rantsi Traders to sell goods to him exclusive of VAT. In  exchange the customer will pay cash for all his purchases. Rantsi Traders stated   that he would then not be able to produce the source document for these sales. 

TOTAL: 300

ACCOUNTING
GRADE 12
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

MARKS: 300  
MARKING PRINCIPLES:

1. Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the  question for that item (no foreign item penalty for misplaced items). No double penalty applied. 
2. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning  marks on the figures for that item. 
3. Full marks for correct answer. If the answer is incorrect, mark the workings provided. 
4. If a pre-adjustment figure is shown as a final figure, allocate the part-mark for the working for that  figure (not the method mark for the answer). 
5. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award  the mark. If no + or – sign or bracket is provided, assume that the figure is positive. 
6. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers  from candidates.   This memorandum is not for public distribution; as certain items might imply incorrect treatment. The  adjustments made are due to nuances in certain questions 
7. Where penalties are applied, the marks for that section of the question cannot be a final negative. 
8. Where method marks are awarded for operation, the marker must inspect the reasonableness of the  answer before awarding the mark. 
9. Operation means 'check operation'. 'One part correct' means operation and one part correct.  NOTE: check operation must be +, -, x, ÷, or per memo 
10. In calculations, do not award marks for workings if numerator and denominator are swapped – this  also applies to ratios. 
11. In awarding method marks, ensure that candidates do not get full marks for any item that is  incorrect at least in part. In such cases, do not award the method mark. Indicate by way of ⌧
12. Be aware that some candidates provide valid alternatives beyond the memorandum.
13. Codes: f = foreign item; p = placement/presentation. 
14. Educators are expected to work through the entire paper and make reasonable adjustments within  the framework of the mark allocation, if necessary. 

MEMORANDUM 

QUESTION 1  
1.1 

1.2
1.2.1 Calculate the value of the closing stock on 30 April 2019.      

1.2.2 Cost of sales:    

Gross Profit %  

Stock holding period for 2019  

 1.2.3 Comment on the stock holding period for 2019. Quote  figures.  
(The stockholding period for 2018 was 182 days.)  

1.2.4 In order to improve on stock losses (20 suitcases) the  previous year, the owner introduced stricter control  measures over stock. Comment on whether it was  successful. Show calculations.  

QUESTION 2    
2.1.1 

2.1.2 Prepare the Bank Reconciliation Statement on 31 January 2019.  

Foreign entries: ‒ 1 (max. 1)  
Be aware of foreign entries incorrectly duplicated in journals and/or reconciliation. 
2.1.3 An internal investigation revealed that deposits are not made  immediately. Quote and explain TWO examples which led to this  finding.  

2.1.4 Provide TWO internal control measures that the business can use to  prevent this from happening again.   

2.2 Reconciled Debtor’s List on 31 March 2019    

*Operation   

QUESTION 3  
INCOME STATEMENT FOR THE YEAR ENDING 30 APRIL 2019  

 *One part correct  

QUESTION 4  
 4.1.1 ISSUED SHARE CAPITAL  

*One part correct 
RETAINED INCOME  

*One part correct 
TRADE AND OTHER RECEIVABLES 

*One part correct  
4.1.2  RADABA LIMITED  
 STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)   28 FEBRUARY 2019   

*One part correct  
4.2
4.1.2 The company issued additional shares at R9. In your opinion  do you think the existing shareholders would be happy with  the issue price? Quote ONE financial indicator with actual  figure/percentage/ratio to support your statement.   

4.2.2 The directors feel that the shareholders should be satisfied  with the performance of the company. Explain and quote  TWO financial indicators with actual figures/ ratios/  percentages to support their opinion.   

4.2.3 The directors decided to increase the loan during the current  financial year. Quote TWO financial indicators (actual   figures/ratios/percentages) that are relevant to their decision.  Explain why this was a good decision, or not.  

QUESTION 5 
 5.1  
5.1.1  

* Operation one part correct   
1 mark for the amount and 1 mark for the correct use of the brackets 
 5.1.2 CASH FLOW STATEMENT ON 30 JUNE 2018    

*Operation one part correct 
5.2 AUDIT REPORT 
5.2.1 What type of report did VOVO Ltd receive? Explain.     

5.2.2 The Companies Act requires public companies to be audited.  Provide a reason for this.   

5.2.3 Explain ONE major consequence for Makaya&Ntini should  they be negligent in performing their duties.    

5.2.4 Name ONE other party, other than the shareholders, that  would be interested in this audit opinion and give a reason for  their interest.  

5.2.5 Briefly indicate how this audit report would possibly affect the  shares of VOVO LTD on the Johannesburg Securities Exchange  (JSE). Mention TWO points.   

QUESTION 6  
6.1 FIXED ASSETS:  
 6.1.1 Calculate the missing figures indicated by A to E in the  incomplete Fixed Assets Note.   

 *One part correct  6.1.2 Prepare the Asset Disposal Account for the office furniture sold.    
 ASSET DISPOAL  

 *One part correct 
6.1.3 Comment on the sale of land to the husband of the CEO.  See information B.  

6.2 VAT  
Calculate the amount of VAT payable to/receivable from SARS on  28 February 2019. Indicate whether the amount is payable or receivable.  

6.3 VAT ETHICS  
6.3.1 Why should Rantsi Traders produce a proof of sales?  

6.3.2 How would this affect the VAT returns of Rantsi Traders?   

6.3.3 Advise Rantsi Traders of the implications, should he agree to this  request. Mention TWO points.  

TOTAL: 300 

AGRICULTURAL SCIENCES
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

MEMORANDUM 

SECTION A  
QUESTION 1 
1.1
1.1.1 B ✔✔ 
 1.1.2 C ✔✔ 
 1.1.3 D ✔✔ 
 1.1.4 A ✔✔ 
 1.1.5 D ✔✔ 
 1.1.6 C ✔✔ 
 1.1.7 A ✔✔  
 1.1.8 D ✔✔ 
 1.1.9 A ✔✔ 
 1.1.10 B ✔✔ (10 x 2) (20)   
1.2
1.2.1 None ✔✔ 
 1.2.2 Both A and B ✔✔ 
 1.2.3 None ✔✔ 
 1.2.4 A only ✔✔ 
 1.2.5 B only ✔✔ (5 x 2) (10)   
1.3
1.3.1 Bloating/Bloat ✔✔ 
 1.3.2 Osteomalacia ✔✔ 
 1.3.3 Diagnosis ✔✔ 
 1.3.4 Superovulation ✔✔ 
 1.3.5 Hermaphroditism ✔✔ (5 x 2) (10)   
1.4
1.4.1 Proteolytic ✔ 
 1.4.2 Endemic ✔ 
 1.4.3 Mitochondria/Mitochondrion ✔ 
 1.4.4 Lactation ✔ 
 1.4.5 Sterility ✔ (5 x 1) (5)   

 TOTAL SECTION A: 45  

SECTION B  
QUESTION 2: ANIMAL NUTRITION 
2.1 A representation of the alimentary canal of a farm animal  
2.1.1 Identification of A and C  

• A: Oesophageal groove ✔ (1) 
• C: Omasum ✔ (1)  

 2.1.2 Explanation of the main function of part A in DIAGRAM 1  

•  It directs the milk to the abomasum ✔ (1)   

 2.1.3 Identification of the true stomach  

•  D ✔ (1)   

 2.1.4 Justification for not feeding urea or biuret to young ruminants 

• Its fore-stomachs (rumen, reticulum and omasum) are still  underdeveloped ✔ with very few or no micro-organism to assist in   digesting ✔ urea and biuret. (2)   

2.2 The part of the alimentary canals of farm animals  
 2.2.1 Identification of A  

• A: Villi / Villus ✔ (1)   

 2.2.2 TWO reasons visible to support adaptation of villi for absorption

• There are many folds that increase surface area for absorption ✔ 
• The folds are covered with thousands of villi which increases  surface area for absorption ✔ 
• Each villus is covered with micro-villi which further increases  surface area ✔ 
• Presence of blood vessels ✔ 
• Presence of lymphatic vessels ✔ (Any 1 x 2) (2)   

2.3 The name of the diseases caused by a deficiency of vitamin/mineral in  lambs 
 2.3.1 Swayback / Anaemia ✔ (1)   
 2.3.2 Muscular dystrophy / White muscle / Stiff lamb disease ✔ (1)  
2.4 Energy flow diagram  
 2.4.1 Energy type represented by A and B  

•  A: Digestible energy / DE ✔ 
• B: Metabolised energy / ME / Metabolisable ✔ (2)  

 2.4.2 (a) The amount of energy left for production and maintenance in   joules  

•  Net energy is 40% (Net) of 1 250 j (Gross Energy) 
•  Net energy =   40  x 1 250 j ✔ 
                         100 
  = 500 j ✔ (2) 

 (b) Total energy losses in kilojoules 
 Total energy losses = (30%) + (5%) + (5%) + (20%) = 60% of    1 250 j = 750 j ✔ 
 = 750 j = 0,75 Kj ✔ (3) 
  1 000✔ 

2.5 The Pearson square
 2.5.1

• (Maize meal): 8%                                         23 ✔ (parts) (39 – 16 = 23)  
                         
  (Soya bean meal): 39%                             8 ✔ (parts) (16 – 8 = 8) 
  The ratio of maize meal to soya bean meal is 23 : 8 ✔ (4)  

 2.5.2 Formulation of 1 500 kg swine ration:  

•  The ratio into which feeds should be mixed is 23 : 8 (maize meal to  soya bean meal) = 23 + 8 = 31 ✔(5)  

2.5.3 Reason for a high protein requirement in piglets  

• Growth and production ✔
• Provision of antibodies for immunity against diseases ✔ 
• Repairing of body tissues ✔ (Any 2 x 1) (2)  

2.6 Fodder-flow:  
 2.6.1 The number of months during which there will be less feed  available than required by the animals  

• 5 months ✔ (1)   

 2.6.2 Calculation of the surplus amount of feed during the month of  October in kilograms (kg)  

•  55 tons – 20 tons = 35 tons ✔ 
• 35 tons x 1000 ✔ = 35 000 kg ✔ (3)   

 2.6.3 TWO strategies a farmer can apply to make sure that the required  feed balances feed available  

•  Culling ✔ 
• Controlled calving ✔ 
• Producing more food at particular times ✔ 
• Storage ✔ (Any 2 x 1) (2)  [35] 

QUESTION 3: ANIMAL PRODUCTION, PROTECTION AND CONTROL
3.1 Animal production systems  
 3.1.1 Identification production systems  

• FARM A: Intensive production system ✔ 
• FARM B: Extensive production system ✔ (2)  

 3.1.2 Justification for QUESTION 3.1.1  
FARM A: Intensive production system  

• Many animals in small area (high density) ✔ 
• High capital investment ✔ 
• Labour intensive ✔ 
• Use of sophisticated technology ✔ (Any 1)  (1)

FARM B: Extensive production system  

•  Few animals occupied a large area (low density) ✔
• ∙ Low capital investment ✔ 
• Very few labour employed ✔ 
• Minimal or no technology use ✔ (Any 1) (1)

3.1.3 Examples of an intensive production system  

• Piggery / Broilers / Layers / Sheep / Boer goats ✔ (Any 1) (1)  

 3.1.4 Differentiation between: Subsistence farming:  

• Farming in small quantities to meet the needs of their families and  sell the surplus ✔ 

Commercial farming:  

• Farming in large quantities in order to make profit ✔ (2)  

3.2 Scenario on animal body temperature
 3.2.1 Indication of the situation at points A and B  
Point A:  

• Cold stress / extremely cold / very cold ✔  (1)

Point B:  

• Heat stress / extremely hot / very hot ✔ (1)

3.2.2 Description of how the situation affects feeding and milk  production in dairy cows  
Point A:  

• They eat more to keep themselves warm ✔ resulting in low milk   production ✔ 

Point B:  

• Animals eat less feed ✔ and milk production decreases ✔ (4)  

 3.2.3 Recommended measures:  
Point A:  

•  Provision of shelter / heaters / air conditioners ✔ (Any 1)

Point B:  

• Provision of shelter / air conditioners / misting 
• Provision of enough water ✔ (Any 1) (2)   

3.3 Completion of the table  

• A: Elastrator with elastic rings / knife / blade ✔ 
• B: Ear tag pliers / Ear tag applicator ✔ 
• C: Elastrator with elastic rings ✔ (3)   

3.4 Scenario 
 3.4.1 Micro-organism responsible for the disease  

• Bacteria ✔ (1)   

 3.4.2 Statement stating that Bovine TB is a zoonotic diseases 

• It can be transmitted from animals to humans as well as to other   animals ✔ (1)   

 3.4.3 TWO examples of zoonotic diseases  

• Anthrax ✔ 
• Rabies ✔ 
• Ringworm ✔ (Any 2) (2)   

 3.4.4 TWO symptoms of animals with TB  

• Respiratory tract problems / increased rate of breathing ✔ 
• Pneumonia symptoms ✔ 
• Chronic cough ✔ 
• Fever ✔ (Any 2) (2)   

 3.4.5 TWO methods to prevent and control the spread of TB 

• Disinfecting of premises ✔ 
• Vaccination ✔ 
• Quarantine ✔ 
• Eradication programme ✔ (Any 2) (2)  

 3.4.6 Table:  
Reported cases of improvement in TB infections presented as a  percentage for six years  

Criteria for marking  

• Correct heading/title ✔ 
• Populated table ✔ 
• Labelling: Years and Infections improvement ✔ 
• Data correctly captured in both columns of the table ✔ 
• Correct units: Percentage (%) ✔ (5)

3.5 TWO preventative /control measures of internal parasites  

• Good management / rotational grazing / avoid wet areas ✔ 
• Good nutrition ✔
• Use of feeders ✔ 
• Provision of clean water ✔ 
• Prevent overstocking ✔ 
• Separate young and adult animals ✔ 
• Strict hygiene / Strict sanitary measures / removal of dung ✔ 
• Breeding resistant animals ✔ 
• Deworming ✔ (Any 2) (2)

3.6 TWO roles of state in animal protection  

• Quarantine services ✔ 
• Enforce legislation ✔ 
• Movement permits ✔ 
• Import bans ✔ 
• Veterinary services ✔ 
• Importation of vaccines ✔ 
• Research ✔ (Any 2) (2)  [35]   

QUESTION 4: ANIMAL REPRODUCTION 
4.1 The reproductive system of a cow
 4.1.1 Identification of parts  

• G: Infundibulum ✔ 
• F: Oviduct / Fallopian tubes ✔ 
• B: Vulva ✔ (3)  

 4.1.2 Matching functions with the letter  

1.  E ✔
2. C / B ✔
3. D ✔ (3)  

 4.1.3 Name and letter of the part  

• Clitoris: ✔ A ✔ (2)  

4.2 Sperm morphology
 4.2.1 Identification  

• E ✔ (1)  

 4.2.2 Naming of the process  

• Spermatogenesis ✔ (1)  

 4.2.3 Explanation of how sperm cells A and G can cause infertility in  a bull  

• A: The sperm cannot move to the point of fertilisation ✔ (1) 
• G: The sperm cannot fertilise the egg cell ✔  (1) 

4.2.4 TWO characteristics of good quality semen  

• It must be viable ✔ 
• Thick whitish to yellow fluid ✔
• It must have normal morphology ✔ 
• Should have no odour ✔ 
• Must have good sperm concentration ✔ 
• Correct pH ✔ 
• High motility rate ✔ (Any 2) (2)  

4.3 Oestrus cycle graph
 4.3.1 Name of the hormone labelled C  

• Progesterone ✔ (1)  

 4.3.2 Indication of the stage of oestrus  

• Di-oestrus ✔ 

Reason  

• It is the longest / it lasts longer ✔ 
• High levels of progesterone ✔ (Any 2) (2)  

 4.3.3 Process represented by A  

•  Ovulation ✔ (1)  

 4.3.4 TWO visible signs of a cow on oestrus  

• Vulva is swollen with reddish mucus membranes ✔ 
• Mucus strings visible from the vulva ✔ 
• Jumps on other cows / allows other cows to jump on her ✔ 
• Scratch marks and dirt on the side and back ✔ 
• Allows mating with the bull ✔ (Any 2) (2) 

4.4 Re-arranged stages of mating  

• Erection of the penis ✔ 
• Mounting ✔ 
• Gaining intromission into the vagina ✔ 
• Ejaculation of semen into vagina ✔ (4)

4.5 Table of different processes  

1. 2 ✔
2. 3 ✔
3. 1 ✔ (3)  

4.6 Stages of parturition 
 4.6.1 Stages of parturition  

• A: Preparatory stage ✔
• D: Ejection stage ✔ (2)  

 4.6.2 TWO visible signs of parturition  

• Restlessness / walking around ✔ 
• Urinates and defecates often ✔ 
• Cow isolates itself ✔ 
• Vulva enlarges ✔ 
• String of mucus hangs from the vulva ✔ 
• Teats tight and swollen / milk drops ✔ (Any 2) (2)

4.7 Milk production graph  
 4.7.1 Name of the graph  

•  Lactation curve / Milk production curve ✔ (1)  

 4.7.2 Identification of the range of days  

•  30 to 60 days ✔ (1)  

 4.7.3 TWO factors influencing the production of milk during the peak  period  

• Age of cow ✔ 
• Pregnancy inhibits milk production ✔ 
• Increased levels of oestrogen ✔ 
• Climatic conditions ✔ 
• Proper nutrition ✔ 
• Number of times the cow is milked ✔ (Any 2) (2)  [35]  

 TOTAL SECTION B: 105 
GRAND TOTAL: 150

AGRICULTURAL SCIENCES
GRADE 12 
NSC EXAMS
PAST PAPERS AND MEMOS JUNE 2019

INSTRUCTIONS AND INFORMATION 

1. Write ALL the answer in your ANSWER BOOK.
2. Start EACH question on a NEW page.
3. Read ALL the questions carefully and answer only what is asked.
4. Number the answers correctly according to the numbering system used in this  question paper.
5. You may use a non-programmable calculator.
6. Show ALL calculations, including units and formulae, where applicable.
7. Write neatly and legibly.

QUESTIONS 

SECTION A 
QUESTION 1 
1.1 Various options are provided as possible answers to the following questions.  Choose the correct answer and write only the letter (A–D) next to the question  number (1.1.1–1.1.10) in the ANSWER BOOK, for example 1.1.11 A. 
1.1.1 The … produce the hormones insulin and glucagon to control sugar  balance in the animal’s body. 

1.  glands of Lieberkühn 
2. islet of Langerhans 
3. Brunner’s glands 
4. duodenal glands 

1.1.2 Hydrochloric acid changes the pH of the stomach into an acid medium  which is most necessary for the actions of the enzymes … 

1.  lipase and lactase. 
2. pepsinogen and bile. 
3. pepsin and rennin. 
4. rennin and succus entericus. 

1.1.3 The statements below are correct with regard to the development of  the forestomachs: 

1. Material flowing in and out of the rumen and reticulum
2. Huge amounts of hydrochloric acid form in the rumen
3. Presence of bacteria and its substrate in the rumen
4. Presence of volatile fatty acids produced during hay fermentation

Choose the correct combination below: 

1. (i), (ii) and (iv) 
2. (ii), (iii) and (iv) 
3. (i), (ii) and (iii) 
4. (i), (iii) and (iv) 

1.1.4 The following is TRUE about diffusion during absorption of nutrients: 

1. Gas or solute passes through a permeable membrane from  higher to a lower concentration area
2. No energy is required for the diffusion process
3. Energy is generated through this process and used by rumen  microbes
4. Diffusion process stops when the concentration is at equilibrium  on both sides 

Choose the correct combination below: 

1. (i), (ii) and (iv) 
2. (ii), (iii) and (iv) 
3. (i), (ii) and (iii) 
4. (i), (iii) and (iv)

1.1.5 The farming instrument or equipment shown in the picture below is  used by farmers to … 

1. administer liquid medication or dosing for internal parasites.
2. topically apply powder, ointments and lotions on an animal’s skin.
3. mix solid food and water for easy drinking. 
4. administer medication such as tablets and capsules or bolus to  animals. 

1.1.6 The picture below shows a farmer carrying a flag and crossing the  road with a flock of sheep. The colour of the flag is most likely to be … 

1. yellow. 
2. white. 
3. red. 
4. blue. 

1.1.7 A farm animal that is in fear, aggression and contentment will show  the following warning signs: 

1. Pinned ears
2. Pawing the ground and snorting 
3. Breathing very fast with its tongue outside the mouth
4. Raised back hair 

Choose the correct combination below: 

1. (i), (ii) and (iv) 
2. (i), (ii) and (iii) 
3. (ii), (iii) and (iv) 
4. (i), (iii) and (iv)

1.1.8 The picture below shows a farm operation where a teaser bull is used. The farm operation represented in the picture above shows the … 

1. artificial insemination. 
2. embryo transfer. 
3. mating. 
4. semen collection. 

1.1.9 The blastocyst consists of two layers of cells. The embryo develops  from the inner layer called … 

1.  embryoblast. 
2. mesoderm. 
3. endoderm. 
4. trophoblast. 

1.1.10 The female animal secretes … to attract bulls. 

1.  hormones 
2. pheromones
3. semen 
4. colostrum (10 x 2) (20)

1.2 Indicate whether each of the following statements in COLUMN B applies to A ONLY, B ONLY, BOTH A AND B or NONE of the items in COLUMN A. Write A only, B only, both A and B or None next to the question number (1.2.1–1.2.5) in the ANSWER BOOK, for example 1.2.6 B only. 
Example: 

Answer: 1.2.6 B only 

(5 x 2) (10) 
1.3 Give ONE term/phrase for each of the following descriptions. Write only the  term/phrase next to the question number (1.3.1–1.3.5) in the ANSWER BOOK. 
1.3.1 The condition where rumen contents produce foam that collects around  the entrance to the rumen resulting in constipation and trapped gas which  cannot be belched out 
1.3.2 The disease common in fully grown animals where too much calcium has  been removed from their skeletons resulting in porous bones 
1.3.3 The identification of a disease from the examination of symptoms 
1.3.4 The phenomena whereby a donor cow produces many ova during the  same oestrus cycle 
1.3.5 The condition when the animal possesses both male and female  reproductive organs  (5 x 2) (10)
1.4 Change the UNDERLINED WORD(S) in EACH of the following statements to  make them TRUE. Write the appropriate word next to the question number  (1.4.1–1.4.5) in the ANSWER BOOK. 
1.4.1 The enzymes in the digestive system responsible for breaking down  protein are lipolytic enzymes. 
1.4.2 Epidemic is when a disease occurs in a population regularly and can  be predicted. 
1.4.3 The midpiece contains centrioles that supplies the energy for  spermatozoon to move. 
1.4.4 Gestation is the period after pregnancy during which a female mammal  produces milk to feed their offspring. 
1.4.5 Infertility is the permanent inability of an animal to reproduce  successfully.  (5 x 1) (5) 

TOTAL SECTION A: 45

SECTION B 
QUESTION 2: ANIMAL NUTRITION 
Start this question on a NEW page. 
2.1 The diagrams below represent the alimentary canal of farm animals.

2.1.1 Identify parts A and C from the above DIAGRAMS. (2)
2.1.2 State the main function of part A in DIAGRAM 1. (1) 
2.1.3 Identify the letter (A–E) that represents a true stomach from the above  DIAGRAMS. (1) 
2.1.4 Farm animals with the digestive system such as the one in DIAGRAM 1  should not be fed with urea or biuret. Justify the statement. (2) 
2.2 The diagrams below represent the part of the alimentary canals of farm  animals. 

2.2.1 Identify the part labelled A from the diagram above. (1) 
2.2.2 The structure above is well adapted to absorb soluble digested food  molecules. Support this statement with TWO reasons visible in the   diagram. (2)
2.3 Suggest the name of the diseases caused by deficiency of the following  vitamin/mineral in lambs: 
2.3.1 Copper (1)
2.3.2 Vitamin E (1)
2.4 The schematic representation below illustrates the energy flow of feeds. 

2.4.1 Identify the type of energy represented by A and B from the above  schematic representation. (2) 
2.4.2 Assume that the above energy flow diagram is for the cattle that  consumed its feed and gained 1 250 joules of gross energy. 

1. Determine the amount of energy left for production and maintenance  in joules. (2)
2. Calculate the total energy losses and present your answer in  kilojoules. (3)

2.5 Read the following scenario on compounding of two feeds. 

A small-scale pig farmer has low cost readily available grounded maize and soya  bean meal available. The farmer was advised by an extension officer to use the two feeds below to formulate a mixture containing 16% DP for best performance. 
2.5.1 Use the information above to determine the ratio into which the two feeds  should be mixed, to achieve the required digestible protein for the herd. (4)
2.5.2 Formulate 1 500 kg of pig ration using the mixture of maize meal and  soya beans meal according to the ratio determined in QUESTION 2.5.1. (5) 
2.5.3 The officer advised the farmer to increase the amount of the protein  rich feed in the mixture for piglets. Justify the statement with TWO   reasons. (2) 
2.6 The graph below illustrates a fodder-flow programme. Answer the questions  that follow. 

2.6.1 Deduce, from the bar graph above, the number of months during which  there will be less feed available than feed required by animals. (1) 
2.6.2 Calculate the surplus amount of feed during the month of October in  kilograms (kg). (3) 
2.6.3 Suggest TWO strategies a farmer can apply to make sure that the feed  required by animals balances with the feed available throughout the   year. (2) [35]

QUESTION 3: ANIMAL PRODUCTION, PROTECTION AND CONTROL
Start this question on a NEW page. 
3.1 The pictures below represent two animal production systems practised in  FARM A and FARM B. 

3.1.1 Identify the animal production systems represented in FARM A and  FARM B in the above illustrations. (2) 
3.1.2 Justify the answer to QUESTION 3.1.1 based on the pictures of FARM  A and FARM B and the information provided. (2) 
3.1.3 Provide an example of the animal production system that could be  practised in FARM A, other than the one shown in the picture. (1) 
3.1.4 Differentiate between subsistence and commercial farming systems. (2)
3.2 Read the following scenario and then answer the questions that follow. 
The management of temperature in cattle is becoming more important as a result  of climate change. 

3.2.1 Indicate the situation at points A and B. (2) 
3.2.2 Describe how the situation explained at points A and B affects the feeding and milk production in dairy cows. (4) 
3.2.3 Recommend ONE measure a farmer can take to address the challenge  at points A and B for a dairy herd raised in an intensive production   system. (2)
3.3 The table below shows different farming practices and the instruments used. 

Complete the table by identifying A, B and C. DO NOT copy the table. (3)
3.4 Read and analyse the following scenario to answer the questions that follow. 
Bovine TB is a disease that is common to animals and can be transmitted from  animals to humans as well as to other animals. Infection can also occur from direct  contact with a wound or by ingesting raw (unpasteurised) milk and other dairy  products from infected cows. 

3.4.1 Name the micro-organism responsible for the disease mentioned in the  above scenario. (1) 
3.4.2 Extract from the above case study a statement stating that the Bovine TB  is a zoonotic disease. (1) 
3.4.3 Give TWO other examples of zoonotic diseases. (2)
3.4.4 Name TWO symptoms of an animal infected with TB. (2) 
3.4.5 Suggest TWO methods that can be used by the farmer to prevent and  control TB infection in farm animals. (2) 
3.4.6 Convert the bar graph of reported cases of improvement in TB infections  to a table. (5) 
3.5 Describe TWO basic preventative/control measures for internal parasites. (2) 
3.6 Indicate TWO roles of the state in animal protection. (2) [35]

QUESTION 4: ANIMAL REPRODUCTION 
Start this question on a NEW page. 
4.1 The diagram below illustrates the reproductive system of a cow. 

4.1.1 Identify the parts labelled G, F and B in the DIAGRAM above. (3) 
4.1.2 Match the functions listed below with a letter (A–K) in the diagram above:

1. Produce female gametes and hormones  
2. Organ of copulation
3. Physical barrier to the uterus, secretes mucous that creates a  cervical plug during pregnancy (3) 

4.1.3 Provide the name and letter (A–K) of the female organ that becomes  erects like a penis during oestrus. (2) 
4.2 The diagram below illustrates different sperm cells. 

4.2.1 Identify the letter (A–G) in the diagram above that represents a sperm  cell with normal morphology. (1) 
4.2.2 Name the process by which sperm cells are formed in the male testis. (1)
4.2.3 Explain how sperm cells A and G can cause infertility in a bull. (2)
4.2.4 List TWO characteristics of good quality semen. (2)
4.3 The graph below represents the levels of hormones at different stages in the  oestrus cycle of a cow. 

4.3.1 Name the hormone labelled C. (1)
4.3.2 Indicate with a reason the stage of oestrus cycle indicated by the letter B. (2)
4.3.3 Name the process represented by A in the graph above. (1)
4.3.4 Name TWO visible signs of a cow on oestrus. (2)
4.4 The list below represents stages of mating or copulation: 

• Gaining intromission into the vagina 
• Ejaculation of semen into vagina 
• Mounting 
• Erection of the penis 

Re-arrange the stages of mating presented in the list above into its chronological  order. (4) 
4.5 The table below represents different procedures, 1, 2 and 3, that are used in  animal reproduction.

Identify the procedure in animal reproduction (1, 2 or 3) that is associated with  the following: 

1. Embryo transplantation (1)
2. Cloning (1)
3. Artificial insemination (1)

4.6 The diagrams below represent a cow at different stages of parturition.

4.6.1 Name the stage of parturition represented by DIAGRAMS A and D  respectively. (2) 
4.6.2 Provide TWO signs of parturition that could be seen in a cow before  stage D. (2) 
4.7 The following graph represents the relationship between the milk yield over a  number of days: 

4.7.1 Give the name of the graph presented above. (1)
4.7.2 Identify the range of days during which milk production is at its peak. (1) 
4.7.3 Name TWO factors that influences the amount of milk produced by a cow  during the peak period. (2) [35] 

TOTAL SECTION B: 105 
GRAND TOTAL: 150

Activity 1

For each of the following isomers:
Write down the structural formula
Identify the type of isomer

1. 2-methylpentane and 3-methylpentane.
2. 1-chlorobutane and 1-chloro-2-methylpropane
3. Propanoic acid and ethyl methanoate (13)  [13]

Solutions:

hint
Structural isomers have different IUPAC names and different physical properties.

Activity 2

Write down the IUPAC names for the following organic molecules.

Solutions

1. 2-methyloct-3-yne 3 (1)
2. butan-2-ol 3 (1)
3. butanal 3 (1)
4. hexan-3-one 3 (1)
5. 3-methyl-butanoic acid 3 (1)
6. methyl butanoate 3 (1)
7. 1-bromo-2,2-dimethyl-propane 3 (1)  [7]

Important to remember:

• When naming haloalkanes, the halogen atoms do not get preferenceover alkyl groups – numbering should start from the side nearestto the first substituent, either the alkyl group or the halogen. Inhaloalkanes, where e.g. a Br and a Cℓ have the same number whennumbered from different sides of the chain, Br gets alphabeticalpreference.
• When writing IUPAC names, substituents appear as prefixes writtenalphabetically (bromo, chloro, ethyl, methyl), but the prefixes di- andtri- should not be used to determine the alphabetical order.
• In molecules where the functional group is ALWAYS on the firstcarbon (such as in the case of carboxylic acids, aldehydes there isNO number added to indicate the position of the fuctional group.(e.g. Ethanoic acid or pentanal.)

Activity 3

1. Which ONE of the following formulae represents an alkane?

1. C₂H₂
2. C₃H₄
3. C₃H₆
4. C₃H₈ (2)

2. An organic compound has the structural formula shown below:

The correct systematic (IUPAC) name for the compound is …

1. but-1-ene.
2. but-2-ene.
3. methylpropene.
4. methylpropane.

3. Which ONE of the following compounds can exist as an isomer?
 (2)

An example of an unsaturated hydrocarbon is:

1. C₂HCℓ₃
2. C₃H₆
3. C₂H₆
4. C₂H₅OH (2)  [8]

Solutions

1. D ✓✓ (2)
2. C ✓✓ (2)
3. B ✓✓ (2)
4. B ✓✓ (2)  [8]

Activity 4

Consider the following list of organic compounds:

1. Using structural formulae, write an equation for the preparation of an ester. Choose the reactants from the above list. (5)
2. Write the letters representing TWO compounds in this list that are isomers. (2)
2.1 C
2.2 D (2)
3. Write down the letter that represents the compound that is formed when ethanol is oxided. (1)
4. Give one use of esters. (1)   [11]

Solutions
1. 
2. A ✓ & F ✓ (5)
2.1 ethylmethanoate ✓ (2)
2.2 but-2-ene ✓ (2)
3. B ✓ (1)
4. Manufacturing of perfumes/flavourants ✓ (1)   [11]

Activity 5

1.1 The boiling points of branched alkanes are lower than those of straight chain alkanes containing the same number of carbon atoms because branched alkane chains have

1. Large molecular masses
2. Longer chain lengths
3. More electrons
4. Smaller effective molecular surface areas (2)

1.2 Which ONE of these compounds has the highest vapour pressure at room temperature?

1. Propane
2. Ethane
3. Ethanol
4. Fluoroethane (2)

2. Will the boiling point of hexane be HIGHER THAN or LOWER THAN that of pentane? Refer to MOLECULAR STRUCTURE, INTERMOLECULAR FORCES and ENERGY needed to explain the answer. (4)
3. How will the boiling point of an ISOMER of Butane compare to that of Butane? Write down HIGHER THAN, LOWER THAN or EQUAL TO. Refer to MOLECULAR STRUCTURE, INTERMOLECULAR FORCES and the ENERGY needed to explain the answer. (4)
4. Consider the boiling points of compounds propan-1-ol (97˚C) and ethanoic acid (118˚C).
4.1 Give a reason for this difference in boiling points by referring to the intermolecular forces present in EACH of these compounds. (3)
4.2 Which ONE of the compounds propan-1-ol or ethanoic acid has a higher vapour pressure? Refer to their boiling points to give a reason for the answer. (3)   [18]

Solutions
1.1 D ✓✓(2)
1.2 A ✓✓ (2)

• Higher ✓
  Structure: Hexane has a longer chain length than pentane. OR Hexane contain more C- atoms than pentane. OR Hexane has a greater molecular size than pentane. OR Hexane has a larger surface area than pentane. ✓
  Intermolecular forces: Between the different molecules of hexane you will find stronger or more intermolecular forces than between the different molecules of pentane. ✓
  Energy: More energy needed to overcome or break intermolecular forces between hexane molecules than you need between pentane molecules. ✓ (4)

3. Lower than ✓

• Isomers of Butane: More branching / Smaller surface area (over which the intermolecular forces act.) ✓ Weaker/less intermolecular forces. ✓ Less energy needed to overcome intermolecular forces. ✓ (4)

4.
4.1 Ethanoic acid: Two sites for hydrogen bonding/forms dimers ✓ Propan-1-ol: One site for hydrogen bonding. ✓ Therefore it will require more energy to break the bonds between the  ethanoic acid molecules than to break the bonds between
the propan-1-ol molecules, ✓ which explains why ethanoic acid has the lower boiling point. (3)
4.2 Propan-1-ol has the highest vapour pressure. ✓Because propan-1-ol has a lower boiling point it means less energy is required to break the bond between the particles of propan-1-ol ✓and therefore more molecules will be present in the vapour state and therefore vapour pressure will increase. ✓  (3)   [18]

Activity 6

1. Unsaturated vegetable oils are hardened to make margarine. The reaction that takes place during the hardening process can be described as:

1. Addition
2. Hydrogenation
3. Substitution

1. I and II
2. II and III
3. Only I
4. Only II (2)

2. Which ONE of the following compounds has the highest melting point?

1. Butane
2. Butene
3. 1-bromobutane
4. 1-methylpropane (2)

3. Which ONE of the following pairs of compounds correctly represents the products formed during the COMPLETE combustion of Octane?

1. CO and H₂O 
2. CO and H₂
3. CO₂ and H₂
4. CO₂ and H₂O (2)

4. Most organic compounds can undergo substitution or addition or elimination reactions to produce a variety of organic compounds. Some incomplete reactions are shown below:

4.1 Name the type of reaction represented by Reaction III. (1)
4.2 Both Reactions I and II are examples of addition reactions. Name the type of addition reaction that is represented by each reaction. (2)
4.3 Write down the IUPAC name of the major product formed in Reaction I. (1)
4.4 Reaction I only takes place in the presence of a catalyst. Write down the formula of the catalyst used in Reaction I. (1)
4.5 Write down the structural formula and the IUPAC name of the major product in Reaction II. (3)
4.6 To which homologous series does the organic product formed in Reaction III belong? (1)  [15]

Solutions
1. A ✓✓ (2)
2. C ✓✓ (2)
3. D ✓✓ (2)
4.1 Elimination ✓ (1)
4.2 I- hydration ✓ II- hydrohalogention 3 (2)
4.3 Butan-2-ol ✓ (1)
4.4 H₂SO₄ ✓ (1)
4.5 2-bromo-2-methylpentane ✓ (3)

4.6 Alkene ✓  (1) [15]

Activity 7

1. Give the definition of a macromolecule (1)
2. Explain the difference between a monomer and a polymer. (2)
3. What is the chemical reaction in which a monomer molecules join to form a polymer called? (1)
4. The polymer below is the product of a polymerisation reaction

4.1 What is the IUPAC name of the monomer used to form this polymer? (1)
4.2 Give the structural formula of the monomer used to form this polymer. (2)
4.3 Is this an example of an addition or condensation polymerisation? Give a reason for your answer. (2)
5. A carboxylic acid monomer and an amine monomer has joined in an amide linkage as shown below.

Name the type of polymerisation that occurs in this equation. Give a reason for your answer. (2)
6. Write an equation for polymerisation of ethane to form polyethene. (2)
7. Is (6) an example of addition or condensation polymerisation? Give a reason for your answer. (2)
8. Name at least three industrial uses of polythene. (3)    [18]

Solutions
1. A molecule that consists of a large number of atoms. ✓ (1)
2. A polymer is a large molecule that is made up of smaller units, covalently bonded to each other in a repeating pattern. ✓Each of these smaller units are called a momomere. ✓ (2)
3. Polymerisation ✓ (1)
4. 4.1 prop-(1)-yne (1)
4.2 (2)
4.3. Addition polymerisation 3 monomers combined through an addition reaction. ✓ (2)
5. Condensation polymerisation. Two monomers with different functional groups are joined ✓ and when they join it leads to the “loss” of a small molecule, in this case, water. ✓ (2)
6.   (2)
7. Addition polymerisation ✓ monomers combinded through an addition reaction. ✓ (2)
8. Any of the following: sandwich bags, ✓cling wrap, ✓ car covers, ✓ squeeze bottles, liners for tanks and ponds, moisture barriers in construction, freezer bags, water pipes, wire and cable insulation, extrusion coating. (3) [18]