ECONOMICS
PAPER TWO (P2)
GRADE 12
NSC PAST PAPERS AND MEMOS
SEPTEMBER 2016

INSTRUCTIONS AND INFORMATION 

1. Answer FOUR questions as follows:
   SECTION A: COMPULSORY
   SECTION B: Answer any 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 the  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 – 15 MINUTES 
1.1 Various options are provided as possible answers to the following questions.  Choose the correct answer and write only the letter (A to C) next to the question  number (1.1.1 to 1.1.8) in the ANSWER BOOK, for example 1.1.9 C. 

1.1.1 Equilibrium price of a commodity occurs when … 

1. 1. market supply of a commodity is more than market demand.
   2. quantity demanded is equal to quantity supplied. 
   3. marginal cost is greater than marginal revenue. 

1.1.2 A cause for imperfect competition is … 

1. 1. freedom of entry. 
   2. advertising. 
   3. selling identical products. 

1.1.3 Social benefits exceeding private benefits is a feature of … goods. 

1. 1. public 
   2. demerit 
   3. primary 

1.1.4 Tourism has the biggest impact on the … industry. 

1. 1. manufacturing 
   2. construction 
   3. service 

1.1.5 A type of inflation that excludes commodities with volatile prices is  known as … 

1. 1. stagflation. 
   2. deflation. 
   3. core-inflation. 

1.1.6 Monopolistic competitive markets make … in the short run only. 

1. 1. economic profit 
   2. normal profit 
   3. economic loss 

1.1.7 An increase in the price of petrol has … influence on tourism. 

1. 1. a positive
   2. a negative 
   3. no

1.1.8 Sewerage dumping can be cited as an example of … pollution. 

1. 1. water 
   2. land
   3. air (8 x 2) (16) 

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

1.3 Give ONE term for each of the following descriptions. Write only the term  next to the question number (1.3.1 to 1.3.6) in the ANSWER BOOK. 

1.3.1 Natural resources that can be replaced or regenerated 
1.3.2 South Africans travelling within South Africa 
1.3.3 A continuous fall in the general price level 
1.3.4 A situation where resources cannot be relocated to make one  person/group better off without making another person/group  worse off  
1.3.5 A seller that has enough market power to influence the price of a  product  
1.3.6 Products that are exactly the same in type, quality and  appearance (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 – 20 MINUTES 2.1 Answer the following questions. 
2.1.1 List any TWO types of subsidies on goods. (2 x 1) (2) 
2.1.2 What is the implication of a horizontal demand curve of an  individual firm in a perfect market on the price? (1 x 2) (2) 
2.2 Study the graph below and answer questions that follow. 

2.2.1 Identify the maximum price from the graph. (1) 
2.2.2 Which quantity will be supplied when the maximum price is  enforced? (1) 
2.2.3 Which role does the government play in redistribution of wealth? (4)
2.2.4 How will the maximum price affect the economy? (4) 

2.3 Study the extract below and answer questions that follow.  

2.3.1 Identify a cost and a benefit from the above extract. (2 x 1) (2)
2.3.2 Explain the concept cost benefit analysis. (2)
2.3.3 Give ONE purpose of a CBA. (2)
2.3.4 How is CBA related to market failure? (4) 

2.4 Explain in detail TWO forms of collusion. (2 x 4) (8) 
2.5 How successful are the market forces in influencing monopolies? (8)

[40]

QUESTION 3: CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 25 MINUTES 
3.1 Answer the following questions. 

3.1.1 List TWO reasons for growth in the tourism sector. (2 x 1) (2) 3.1.2 How will key inputs contribute to cost push inflation? (1 x 2) (2)

3.2 Study the table below and answer the questions that follow. 

[Source: Stats SA 2015] 

3.2.1 Which year is considered the base year from the table? (1) 
3.2.2 What tendency did the inflation rate show over the last three  years? (1) 
3.2.3 Explain the concept CPI. (2) 
3.2.4 Why do people lose confidence in their currency during  hyperinflation? (2) 
3.2.5 Calculate the CPI as indicated by the letter A. Show all  calculations. (4)

3.3 Study the extract below and answer the questions that follow. 

3.3.1 Identify TWO campaigns from the extract that are used to promote  domestic tourism. (2 x 1) (2) 
3.3.2 Explain the concept tourism. (2)
3.3.3 What marketing strategy can South Africa use to improve tourism? (2) 
3.3.4 How will tourism benefit the business sector in your local community? (4)

3.4 Explain any TWO causes of demand pull inflation. (2 x 4) (8) 
3.5 How can indigenous knowledge systems be used to increase tourism in  South Africa? (4 x 2) (8)

[40]

QUESTION 4: MICROECONOMICS AND CONTEMPORARY ECONOMICS ISSUES 40 MARKS – 20 MINUTES 
4.1 Answer the following questions. 

4.1.1 List any TWO characteristics of monopolistic competition. (2 x 1) (2) 
4.1.2 Why is it important for tourist policies to promote and encourage  eco-friendly tourism? (2) 

4.2 Study the graph below and answer the questions that follow. 

4.2.1 Identify the part that refers to ecotourism in the cartoon. (2) 
4.2.2 Why is the growth in tourism industry problematic to the  environment? (2) 
4.2.3 How will tourists benefit from a poor country as holiday  destination? (2) 
4.2.4 How can South Africa as a developing country benefit more from  international tourism? (4) 

4.3 Study the graph below and answer the questions that follow. 

4.3.1 Identify the market structure represented by the above graph. (1)
4.3.2 At what price will the firm sell its products? (1)
4.3.3 Briefly explain with reason the shape of the above demand curve. (4) 
4.3.4 How do firms successfully use product differentiation as a form of  non-price competition? (4) 

4.4 Discuss any TWO consequences of inflation. (2 x 4) (8) 
4.5 How does the government discourage and encourage externalities? (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 – 35 MINUTES 

Markets are one of the crucial elements of our economy. Economics ensures that  our scarce resources are used efficiently to produce goods and services and sell  through the markets. 
Discuss the three equilibrium positions in the short run under perfect markets with  the aid of well labelled graphs. (26) 
Why are equilibrium positions in the short-term not sustainable in the long-run? (10)

[40] 

QUESTION 6: CONTEMPORARY ECONOMICS 40 MARKS – 35 MINUTES 

Issues of the environment in this day and age are extremely important. It  becomes important for all stakeholders in the economy to come on board and  make a mark in trying to sustain the environment. 
Discuss public sector control as measures to ensure environmental sustainability. (26) 
How effective are the South African government’s interventions with regard to  environmental sustainability? (10)

[40] 
TOTAL SECTION C: 40
GRAND TOTAL: 150