ECONOMICS
PAPER 2
GRADE 12 
AMENDED SCE PAST PAPERS AND MEMOS
MAY/JUNE 2018

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

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 answer and write only the letter (A–D) next to the question  numbers (1.1.1 to 1.1.8) in the ANSWER BOOK, for example 1.1.9 D. 
1.1.1 The supply curve for the individual firm under perfect conditions  is … sloped. 

1. negatively
2. positively
3. horizontally
4. vertically 

1.1.2 An industry with only two producers controlling the market is known  as a/an … 

1. duopoly.
2. monopoly.
3. oligopoly.
4. tripoly. 

1.1.3 Public goods are provided and funded by … 

1. markets.
2. factories.
3. governments.
4. companies. 

1.1.4 The government can introduce … to increase the mobility of labour. 

1. taxes
2. poverty
3. inflation
4. training programmes 

1.1.5 The South African Reserve Bank is responsible for implementing  … policy. 

1. fiscal
2. domestic
3. monetary
4. foreign trade

1.1.6 People travelling to South Africa from other countries are known  as … tourists. 

1. inbound
2. influx
3. internal
4. outbound 

1.1.7 Global warming is caused by the release of … into the atmosphere. 

1. oxygen
2. carbon dioxide
3. hot air
4. cold air 

1.1.8 The institution that publishes the consumer price index on a  monthly basis is … 

1. the Department of Finance. 
2. the Department of Tourism. 
3. the South African Revenue Services. 
4. Statistics South Africa. (8 x 2) (16)  

1.2 Choose a description from COLUMN B that matches the item in COLUMN A.  Write only the letter (A–I) next to the question numbers (1.2.1 to 1.2.8) in the  ANSWER BOOK. 

1.3 Give ONE term for each of the following descriptions. Write only the term  next to the question numbers (1.3.1 to 1.3.6) in the ANSWER BOOK.  Abbreviations, acronyms and examples will NOT be accepted. 
1.3.1 Sum of all individual businesses producing a similar kind of product
1.3.2 The wage rate set by government, below which no employer can  pay his/her workers 
1.3.3 The combined cost of goods or services to producers and  consumers and society as a whole 
1.3.4 An extreme increase in price of more than 50% per month 
1.3.5 The type of tourism that involves attending conferences, trade fairs  and exhibitions in other countries 
1.3.6 A variety of plant and animal species found in a particular  environment (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: MICROECONOMICS 40 MARKS – 30 MINUTES
2.1 Answer the following questions. 
2.1.1 Give any TWO examples of variable costs. (2 x 1) (2)
2.1.2 How are consumers affected by price leadership? (1 x 2) (2)
2.2 Read the extract below and answer the questions that follow. 

2.2.1 Identify ONE way in the extract in which the banks colluded  regarding the exchange of the dollar for the rand at fixed prices. (1) 
2.2.2 To what kind of market structure does the extract refer? (1)
2.2.3 Briefly describe the term cartel. (2) 
2.2.4 Explain the view of the competition policy on the formation of  cartels. (2) 
2.2.5 How would cartels in the banking sector affect South Africa's foreign trade? (2 x 2) (4)
2.3 Study the graph below and answer the questions that follow. 

2.3.1 What is the equilibrium price in the graph above? (1)   
2.3.2 Identify the quantity of goods above which will be supplied  if a maximum price of R70 is implemented. (1) 
2.3.3 Briefly describe the term market failure. (2) 
2.3.4 Why will a government implement maximum prices of certain  goods? (2) 
2.3.5 Use the graph to explain the impact of maximum prices on the  market. (2 x 2) (4) 
2.4 Briefly discuss merit and demerit goods as a cause of market failure. (2 x 4) (8)
2.5 Draw a fully labelled graph to illustrate the long-run equilibrium of the  monopoly. (8) [40] 

QUESTION 3: CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 30 MINUTES 
3.1 Answer the following questions. 
3.1.1 Name any TWO types of pollution. (2 x 1) (2)
3.1.2 How is a reduction in taxes linked to demand pull inflation? (1 x 2) (2)
3.2 Read the extract below and answer the questions that follow. 

3.2.1 Identify ONE item which low-income earners may struggle to pay  when inflation is high. (1) 
3.2.2 Which phrase in the extract implies a decrease in the quantity of  goods purchased by the consumer? (1) 
3.2.3 Briefly describe the term inflation. (2)
3.2.4 How do the actions of trade unions cause inflation? (2)
3.2.5 How can the government use taxation to combat inflation? (2 x 2) (4)
3.3 Study the cartoon below and answer the questions that follow. 

3.3.1 Identify ONE environmental problem in the cartoon above. (1) 
3.3.2 Identify the phrase in the cartoon that relates to the loss of  biodiversity. (1)   
3.3.3 Briefly describe the term pollution. (2) 
3.3.4 Explain a measure adopted by the international community to deal  with the loss of biodiversity. (2) 
3.3.5 Why is hazardous and chemical waste regarded as harmful to the  environment? (2 x 2) (4) 
3.4 Differentiate between the consumer price index (CPI) and the producer price  index (PPI). (2 x 4) (8) 
3.5 How can the government promote South Africa as a tourist destination? (8) [40]

QUESTION 4: MICROECONOMICS AND CONTEMPORARY ECONOMIC ISSUES   40 MARKS – 30 MINUTES  
4.1 Answer the following questions. 
4.1.1 Give any TWO examples of world heritage sites in South Africa. (2 x 1) (2) 
4.1.2 Why is there a high degree of interdependence between firms in an  oligopoly market? (1 x 2) (2) 
4.2 Study the information below and answer the questions that follow.

4.2.1 Give ONE example of monopolistic competition in the information above. (1) 
4.2.2 Identify ONE method in the information above that is used in non price competition. (1) 
4.2.3 Briefly describe the term monopolistic competition. (2) 
4.2.4 How does a monopolistic competitor differ from a perfect  competitor in terms of market information? (2) 
4.2.5 Why do monopolistic competitors achieve only normal profit in  the long run? (2 x 2) (4) 
4.3 Study the information below and answer the questions that follow. 

4.3.1 Identify the number of jobs created in the tourism sector in 2016. (1)
4.3.2 What was the general unemployment rate in 2017? (1)
4.3.3 Briefly describe the term tourism. (2) 
4.3.4 Give ONE reason why South Africa is experiencing growth in  tourism. (2) 
4.3.5 Why is the tourism industry successful in creating jobs in South Africa? (2 x 2) (4) 
4.4 Briefly discuss the reasons for a cost-benefit analysis (CBA). (4 x 2) (8)
4.5 Advise the governor of the Reserve Bank on how monetary policy could be  used to combat inflation. (8) [40] 

TOTAL SECTION B: 80

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

QUESTION 5: MICROECONOMICS 40 MARKS – 40 MINUTES  

• Discuss in detail, without the use of graphs, the market structure of a perfect  market. (26 marks)
• With the aid of a graph, explain economic loss of the perfect competitor.  (10 marks) [40]   

QUESTION 6: CONTEMPORARY ECONOMIC ISSUES 40 MARKS – 40 MINUTES  

• Discuss in detail the measures used by government to ensure sustainable  development. (26 marks)
• Evaluate how successful the government has been to conserve and preserve the  environment in South Africa. (10 marks) [40] 

TOTAL SECTION C: 40
GRAND TOTAL: 150