ECONOMICS
GRADE 12
PAPER 2 
NSC PAST PAPERS AND MEMOS
SEPTEMBER 2017

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. Number the answers correctly according to the numbering system used in  this question paper. 
3. Write the number of the question above each answer. 
4. Read the questions carefully and start each question on a NEW page.
5. Leave 2–3 lines between subsections of questions. 
6. Answer the questions in full sentences and ensure that the format, content  and context of your responses comply with the cognitive requirements of the  questions. 
7. Answer only the required number of questions. Answers in excess of the  required number will NOT be marked. 
8. Use only black or blue ink. 
9. A non-programmable pocket calculator may be used. 
10. Write neatly and legibly.

QUESTIONS 

SECTION A (COMPULSORY) 
QUESTION 1 30 MARKS – 20 MINUTES 
1.1 Various options are provided a possible answers to the following questions.  Write down the question number (1.1.1–1.1.8), choose the correct answer and  make a cross over the letter (A–D) of your choice in the ANSWER BOOK.  
1.1.1 With cost-benefit analysis a project will be accepted when … 

1. social costs exceed social benefits.
2. private benefit exceeds private cost.
3. private costs exceed private benefit.
4. social benefits exceed social costs. 

1.1.2 Actual expenditure of a business on inputs required for production is  called … costs.  

1. implicit
2. explicit
3. total
4. average 

1.1.3 Minimum returns required by the owners of a firm can be referred to as  an/a … profit. 

1. pure 
2. economic 
3. supernormal
4. normal  

1.1.4 When average revenue is lower than average cost, the firm is … 

1. suffering an economic loss.
2. making a normal loss.
3. reaching break-even point.
4. receiving excessive revenue. 

1.1.5 Foreign tourists visiting South Africa are also called … tourists. 

1. domestic
2. outbound 
3. inbound
4. local

1.1.6 Headline inflation is also known as …inflation. 

1. adjusted core 
2. unadjusted CPI 
3. core 
4. PPI  

1.1.7 Stagflation is associated with ... 

1. high unemployment, high growth and low inflation.
2. low prices, high unemployment and high growth.
3. low growth, high unemployment and high inflation.
4. high growth, low unemployment and low inflation. 

1.1.8 The market mechanism usually fails to … pollution. 

1. reduce
2. control
3. eradicate
4. correct (8 × 2) (16) 

1.2 Choose a description from 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. 

1.3 Give the correct concept for each of the following descriptions. 

1.3.1 A legally established price floor on wages that is determined by the  government 
1.3.2 The variety of plant and animal life in a particular habitat 
1.3.3 Carbon dioxide (CO2) gas that is released into the atmosphere due to  different economic activities 
1.3.4 An arrangement that occurs when sellers enter into an agreement to  limit competition 
1.3.5 Prices that are set by government or controlled by government through  appointed authorities 
1.3.6 Firms that have no influence on price (6 × 1) (6)

[30] 
TOTAL SECTION A: 30

SECTION B 
Answer any TWO of the three questions from this section in your ANSWER BOOK.
QUESTION 2: MICRO ECONOMICS 40 MARKS – 30 MINUTES
2.1 Answer the following questions. 

2.1.1 Name any TWO characteristics of oligopolistic markets. (2 × 1) (2) 
2.1.2 Why is it only possible in the long run to vary all factors of production?  (1 × 2) (2) 

2.2 Study the graph below and answer questions that follow. 

2.2.1 Which market structure is depicted in the graph above? (1)
2.2.2 Identify profit maximisation point in the above graph. (1)
2.2.3 Briefly describe the demand curve in the graph above. (2)
2.2.4 Briefly explain the output level of a perfect competitor. (2) 
2.2.5 Calculate the profit/loss of the individual firm above. Show ALL  calculations. (4)

2.3 Read the extract below and answer the questions that follow. 

2.3.1 What is the official unemployment rate in South Africa? (1)
2.3.2 Identify a reason for market failure mentioned in the extract above. (1) 
2.3.3 Explain why more labourers are being excluded from the labour  market. (2 × 2) (4) 
2.3.4 How can the market failure mentioned in the extract above be  resolved? (2 × 2) (4) 

2.4 Explain free competition and nature of the product as characteristics of perfect  markets. (2 × 4) (8) 
2.5 With the aid of a diagram explain why oligopolists are reluctant to participate in  price competition. (8)

[40]

QUESTION 3: CONTEMPORARY ECONOMIC ISSUES                40 MARKS – 30 MINUTES 
3.1 Answer the following questions. 

3.1.1 Name TWO positive effects that tourism will have on our economy. (2 × 1) (2) 
3.1.2 How does air pollution effect the environment? (1 × 2) (2)

3.2 Study the information below and answer questions that follow. 

3.2.1 What type of tourism is portrayed in the picture above? (1)
3.2.2 At what rate is cultural tourism growing worldwide? (1)
3.2.3 Briefly describe the term Indigenous Knowledge Systems. (2)
3.2.4 Explain ONE reason for growth in the tourism industry. (2) 
3.2.5 How can South Africa use its world heritage sites more effectively to  promote tourism? (2 × 2) (4)

3.3 Study the information below and answer questions that follow. 

3.3.1 Who is the number one enemy for our economy depicted in the  cartoon above? (1) 
3.3.2 What happens to the economy according to the cartoon above? (1)
3.3.3 Briefly describe the term hyperinflation? (2)
3.3.4 How can taxation be used to reduce inflation? (2)
3.3.5 What is the relation between inflation and wage demands? (2 × 2) (4) 

3.4 Discuss income and infrastructure as benefits of tourism to households.  (2 × 4) (8) 
3.5 What role does South Africa play in alleviating the negative effects of global  warming? (8)

[40]

QUESTION 4 MICROECONOMICS AND CONTEMPORARY ECONOMIC  ISSUES 40 MARKS – 30 MINUTES 
4.1 Answer the following questions. 

4.1.1 Name TWO examples of renewable resources. (2 × 1) (2)
4.1.2 What is the purpose of inflation targeting? (1 × 2) (2)

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

4.2.1 Which serious problem is currently experienced in the Eastern Cape? (1)
4.2.2 Why is food security threatened in the country? (1) 
4.2.3 How can the public sector use education to ensure environmental  sustainability? (2 × 2) (4) 
4.2.4 What can the government do to solve the water crisis in the country? (2 × 2) (4)

4.3 Study the extract below and answer questions that follow. 

4.3.1 Who was the first economist to identify monopolistic competition? (1)
4.3.2 Give an example of a business operating in a monopolistic market. (1) 
4.3.3 Briefly describe the hybrid structure as a feature of monopolistic  competition. (2 × 2) (4) 
4.3.4 How can restaurants use differentiated strategies to attract more  customers? (2 × 2) (4) 

4.4 Explain externalities as a cause of market failures without a graph. (4 × 2) (8) 
4.5 How has the implementation of minimum wages benefited workers in South  Africa? (8)

[40] 
TOTAL SECTION B: 80

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

 QUESTION 5: MICROECONOMICS 40 MARKS – 40 MINUTES 
A monopoly is one of the extreme ends of our market structures and is an integral part  of our economy. 

• Examine the characteristics of a monopoly as a market structure. (26)
• Why, in your opinion, is a monopoly an undesirable type of market structure? (10) 

QUESTION 6: CONTEMPORARY ECONOMIC ISSUE       40 MARKS – 40 MINUTES 
In today’s declining economic climate, all the sectors of the economy are adversely  affected by the negative effects of inflation. 

• Analyse the causes of cost push inflation. (26)
• What impact does inflation have on the households? (10) 

TOTAL SECTION C: 40 
GRAND TOTAL: 150