ECONOMICS GRADE 10 CYCLE TEST 2 MEMO

TIME: 1 HOUR
MARKS: 100
NAME:
DATE:

3 AUGUST 2015

EDUCATOR:

INSTRUCTIONS

Work neatly
Section A is compulsory Folio paper.
Section B Choose either Question 4 or 5 Folio paper.
Section C: Choose either Question 6 or 7 Folio paper.
Read the questions carefully and follow them precisely.
NO Tippex is allowed - learners will obtain O for any answers where Tippex was used.
Only blue pen may be used!P
Calculators may be used, where necessary.
Draw a marking margin and write between the two margins.
Number to the right of the red margin.
GOOD LUCK!

QUESTION
SECTION A
SECTION B
SECTION C

MARK

SHORT QUESTIONS
MEDIUM LENGHT QUESTIONS
ESSAY QUESTIONS
TOTAL

20
40
40
100

SECTION A

SHORT QUESTIONS

OUESTION 1
MATCH THE LETTER IN COLUMN B WITH THE NO IN COLUMN A.
Use only CAPITAL letters e.g. 1.1 A
COLUMN A

1.1

Trade-off between products.

1.2

An indirect tax that the government.

levies for goods regarded as harmful.

1.3

COLUMN B

A.

Monopoly.

B.

Value.

A situation in which the current

combination of goods and services
does not give the maximum satisfaction. C.

1.4

A single supplier for a service in the

market.

1.5

D.

Allocative inefficiency.

E.

Excise duty.

F.

Customs duty.

G.

Oligopoly.

H.

Tax incidence.

The maximum amount a consumer is

willing to pay for a good or service.

1.6

Opportunity cost.

An indirect tax that the government levies

on imported goods.

(6 x 1 = 6)

QUESTION 2: TRUE OR FALSE

Write only true or false
2.1

Demand curve has a negative slope.

2.2

A substitute is a good that can be used in the place of another good.

2.3

The minimum price of a good or service is set above the equilibrium or market price.

2.4

Public goods are rivalry in consumption.

(4 x 1 = 4)

QUESTION 3: MULTIPLE CHOICES

Use only CAPITAL letters e.g. 3.1 A
3.1 The line that shows different combinations of goods that can be bought by a consumer is known as
the ___________ line.
A. Budget
B. Production
C. Sales
3.2 Which of the following is not an example of an indirect tax?
A. Income tax
B. Value Added Tax
C. Excise tax
3.3 A typical business cycle___________.
A. Show economic growth
B. Has four phases
C. Repeats itself
3.4 Opportunity cost is the term used to___________.
A. Explain how people make choices.
B. Refer to the value of the next best alternative that was sacrificed.
C. Explain how opportunity works in the economy.
3.5 When an economy is in a cyclical boom, government should___________.
A. Increase social grants
B. Decrease taxation
C. Use restrictive fiscal policy
(5 x 2 = 10)

TOTAL SECTION A 20 MARKS

SECTION B

MEDIUM LENGHT QUESTIONS

Answer ONLY ONE of the two questions.

OUESTION 4 all answers must be in point form but full sentences.

4.1

List TWO characteristics of utility.

(2 x 1 = 2)

4.2

What is the effect of scares resources to consumers, producers and government?

(1 x 2 = 2)

4.3

Study the following table and answer the questions that follow:
PRICE PER TYRE
100
200
300
400
500
600
700

QUANTITY DEMANDED
70
60
50
40
30
20
10

QUANTITY SUPPLIED
10
20
30
40
50
60
70

4.3.1 Explain the term Equilibrium price

(3)

4.3.2 Determine the equilibrium price from the table.

(2)

4.3.3 use the above table to draw the demand and supply curves on the same axis,
also clearly indicate the equilibrium position.
4.4

Production Possibility Curve

(5)

4.4.1 What is the purpose of the Production Possibility Curve?

(2)

4.4.2 Is the production at point Z possible? Motivate your answer.

(3)

4.4.3 Which point is regarded as inefficient? Motivate your answer.

(3)

4.4.4 How many apples can be produced if all resources were used in the production of apples?

(2)

4.5

Explain two kinds of production inefficiencies.

(2 x 4 = 8)

4.6

Differentiate between complementary goods and substitute goods.

(4 x 2 = 8)
(40)

OUESTION 5 all answers must be in point form but full sentences.

5.1

List any two factors that can change the demand for a good.

(2)

5.2

What effect does inefficiencies have on consumers?

(2)

5.2

Study the table below and answer questions that follow:

NO. OF PIES
0
1
2
3
4
5
6

TOTALUTILITY
0
A
90
120
140
C
155

5.2.1

Define the term marginal utility

5.2.2

Calculate the missing values: A - C

MARGINAL UTILITY
0
50
B
30
20
10
5

5.2.3 As more pies are consumed, the total utility will increase or decreases?
5.3

Study the table below and answer questions that follow:

(2)
(3 x 2 = 6)
(2)

5.3.1 Which phenomenon is indicated by the above graph?

(2)

5.3.2 Identify the phase that occurs between the years 2000 2002.

(2)

5.3.3 From 2003 2006 there was an improvement in the economy.

Explain how the government had make use of fiscal policy to improve the economy.

(6)

5.4

List and explain any two stages of production.

(2 x 4 = 8)

5.5

Compare any two business cycle indicators, also include appropriate examples.

(2 x 4 = 8)
(40)

TOTAL SECTION B 40 MARKS

SECTION C

ESSAY QUESTIONS

Answer ONLY ONE of the two essay questions.

OUESTION 6 all answers must be in point form but full sentences.

What are the reasons for the business cycle? Why is it that the output of the economy increases and
decreases with the passage of time? The reasons can be from the inside or the outside of the Business
Cycle.
Discuss the reasons/ causes of the business cycle.

(26)

What is the impact of the business cycle on the economically vulnerable?

(10)

Your essay must have an introduction, body and conclusion. Structure your ideas logically by using
appropriate headings. Use applicable examples in your discussion.
OR

OUESTION 7 all answers must be in point form but full sentences.

The government is one of the four important participants in the economy.
Without using graphs, discuss the various ways in which the government intervenes
in the economy. In addition, outline the reasons why the government needs to intervene
in the economy.

(26)

In your opinion what will be the effect of minimum wage on employment in an attempt to
fight poverty?
6

(10)

Your essay must have an introduction, body and conclusion. Structure your ideas logically by using
appropriate headings. Use applicable examples in your discussion.
TOTAL SECTION C 40 MARKS
GRAND TOTAL 100 MARKS
ECONOMICS GRADE 10 CYCLE TEST 2 MEMO
TIME: 1 HOUR
MARKS: 100

QUESTION
A

SECTION A
SECTION B
SECTION C

MARK

SHORT QUESTIONS
MEDIUM LENGHT QUESTIONS
ESSAY QUESTIONS
TOTAL

20
40
40
100

SECTION
SHORT

QUESTIONS
OUESTION 1
MATCHING COLUMNS.
1.

2.

3.

4.

5.

6.

(6 x 1 = 6)

QUESTION 2:
TRUE OR FALSE
2.1

TRUE

2.2

TRUE

2.3

TRUE

2.4

FALSE

(4 x 1 = 4)

QUESTION 3
MULTIPAL CHOICE
3.1.

3.4.

3.2.

3.5.

3.3.

(5 x 1 = 5)

TOTAL SECTION A 20 MARKS

SECTION B

MEDIUM LENGHT QUESTIONS

OUESTION 4
4.1 ANY TWO

Utility varies from place to place

Utility varies from person to person

Utility varies from time to time

Utility cannot be measured

(2 x 1 = 2)

4.2 ONE OF THE FOLLOWING:

Consumer, Government and producers must make choices.

(1 x 2 = 2)

4.3.1
Equilibrium point means that at a certain price the quantity demanded is exactly the same as the
quantity supplied.
4.3.2
Equilibrium price is R400.00

(3 x 1 = 3)

(1 x 2 = 2)

4.3.3

(4 x 1 = 5)
4.4.1
PPC shows all possible combinations of goods that can be produced with a given
set of resources.

(1 x 2 = 2)

4.4.2
No - because it is outside the PPC. It is not possible to produce that combination because the
resources are insufficient.

(3 x 1 = 3)

4.4.3
W - because it is inside the PPC/ resources are wasted.

(3 x 1 = 3)

4.4.4
500 Apples

(2 x 1 = 2)

Productive inefficiency - if production efficiency is not achieved, productive

inefficiency prevails.
Allocative inefficiency - if allocative efficiency is not achieved, alocative
inefficiency prevails.

(2 x 4 = 8)

4.5

4.6
Complementary goods are goods that are used together to satisfy a need/ want
E.g. CD and CD player
Substitutes are goods that can replace one another
E.g. Butter and Margarine

(4 x 2 = 8)
(40)

QUESTION 5
5.1

Change in price

Changes in tastes and preferences

Change in income of households
Change in price of related goods

(2 x 1 = 2)

A consumer standard of living is dropped below the countrys potential

(1 x 2 = 2)

5.2

5.2.1
Marginal Utility is the amount by which total utility changes as an additional unit of a good or
service is consumed.
5.2.2

(1 x 2 = 2)

A = 50
B = 40
C = 150

(3 x 2 = 6)

5.2.3

Increases

(1 x 2 = 2)

5.3.1

Business Cycle

(1 x 2 = 2)

5.3.2
Contraction / downswing

(1 x 2 = 2)

5.3.3
Increase government spending
E.g. road construction will create more job opportunities
Decreasing in tax
E.g. will increase households disposable income therefore demand for goods and services will
increase

(6 x 1 = 6)

5.4 ANY TWO

Primary production refers to extraction of natural resources from nature e.g. timber
Secondary production refers to transformation of raw materials into goods and services
e.g. furniture
Tertiary production refers to supply of services/ is also known as services sector e.g.transport
5.5 ANY TWO
Co-incident indicators
Tells us about the currents state of the economy
e.g. utilisation of capacity in manufacturing
Lagging indicators
Shows us what has happened to the economy.
e.g. number of commercial vehicles sold
Leading indicators
Shows us what might happen to economic activity in the future
e.g. price of petrol, price of electricity
TOTAL SECTION B 40 MARKS

SECTION C

ESSAY QUESTIONS

Answer ONLY ONE of the two essay questions.

OUESTION 6 Answer must be in point form but full sentences

OUESTION 7 Answer must be in point form but full sentences

(2 x 4 = 8)
(40)

TOTAL SECTION C 40 MARKS

GRAND TOTAL 150 MARKS