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1 Economics Grade 10 Grade 10 Grade 10 Grade 10 Grade 10 Grade 10 Grade 10 Exam CAPS

2 Grade 10 ECONOMICS PRACTICE TEST ONE Marks: 60 QUESTION 1 Choose the correct term in brackets. Write only the term next to the question number ( ) in your answer book. 1.1 (Micro-economics/Macro-economics) examines economy-wide phenomena such as unemployment, national income, economic growth and inflation. (2) 1.2 The theory of price determination is an example of a topic study in (microeconomics/macro-economics). (2) 1.3 To say, income tax in South Africa is an unfair system of taxation, is an example of a (normative/positive) statement. (2) 1.4 To say, interest rates in South Africa are below 10%, is an example of a (normative/positive) statement. (2) [8] QUESTION 2 List the THREE basic economic questions. [6] QUESTION 3 Draw and label a circular flow diagram to show how firms, households and the government interact in an open economy. [18]

3 QUESTION 4 Study the diagram below and then answer the questions that follow. 4.1 Identify the missing parts (labelled A D) in the diagram above. (8) 4.2 Explain whether the above diagram represents an open or closed economy. (4) 2

4 4.3 Use the figures in the table below to calculate the value of aggregate spending in the economy. Areas of spending Symbols Aggregate spending Consumption spending C R140 million Investment spending I R20 million Government spending G R90 million Imports M R40 million Exports X R10 million (8) [20] QUESTION 5 Choose the correct term in brackets. Write only the term next to the question number ( ) in your answer book. 5.1 During a recession in the business cycle, there is an increase in the rate of (unemployment/economic growth). (2) 5.2 During a boom in the business cycle, there is (a depreciation/an appreciation) of the local currency. (2) 5.3 Technological advances which improve productivity levels will generally lead to an economic (recession/boom). (2) 5.4 During an economic (boom/recession), there is an increase in the real value of goods and service produced. (2) [8] [TOTAL: 60 marks] 3

5 Grade 10 ECONOMICS PRACTICE TEST TWO Marks: 70 QUESTION 1 Various possible answers are provided for each of the following questions. Write the letter only of the correct answer next to the relevant question number. 1.1 Which of the following factors would lead to an increase in the demand for DVDs? A A decrease in the price of DVDs. B An increase in the supply of DVDs. C A decrease in the price of DVD players. D A decrease in the supply of DVDs. (2) 1.2 Which of these statements best describes the law of demand? A When the supply of a product increases the demand will increase. B When the price of a product increases the quantity demanded will decrease. C When the price of a product increases the quantity demanded will increase. D If consumer incomes increase there will be an increase in demand for a product. (2) 1.3 Suppose there is a very effective advertising campaign for a particular good. The effect of this, ceteris paribus, will be: A B C a shift along the demand curve up and to the left. a shift along the demand curve down and to the right. a shift in the position of the demand curve up and to the right. D a shift in the position of the demand curve down and to the left. (2) 1.4 A shows what can be produced when using the factors of production in the most efficient way possible. A B C balance of payments account market equilibrium curve production possibility curve D graph depicting the intersection of a demand curve and a supply curve. (2) 4

6 1.5 Suppose there is an increase in the demand for a good. This, will ceteris paribus, lead to A B C D a decrease in the equilibrium price and quantity of the good. an increase in the equilibrium price and quantity of the good. an increase in the equilibrium price and a decrease in the equilibrium quantity of the good. a decrease in the equilibrium price and an increase in the equilibrium quantity of the good. (2) 1.6 Suppose there is an increase in the supply of a good. This, will ceteris paribus, lead to A B C D a decrease in the equilibrium price and quantity of the good. an increase in the equilibrium price and quantity of the good. an increase in the equilibrium price and a decrease in the equilibrium quantity of the good. a decrease in the equilibrium price and an increase in the equilibrium quantity of the good. (2) 1.7 Suppose that the demand and supply of a product increase simultaneously. This, will ceteris paribus, lead to A B C an increase in the market price. a decrease in the market price. an increase in the equilibrium quantity. D a decrease in the equilibrium quantity. (2) 1.8 Suppose that unfavourable weather conditions affect the supply of apples in South Africa. The effect of this, ceteris paribus, will be: A B C a shift along the supply curve up and to the right. a shift along the supply curve down and to the left. a shift in the position of the demand curve down and to the right. D a shift in the position of the demand curve up and to the left. (2) 5

7 1.9 Which of the following statements best describes the law of supply? A When the demand for a product increases the supply decreases. B When the demand for a product decreases the supply decreases. C When the price of a product increases the quantity supplied increases. D When costs of production increase the supply of a product will decrease. (2) [18] QUESTION 2 List any THREE functions of a market. [6] QUESTION 3 Study the figures below: Quantity 15 Fixed Cost 250 Variable cost 500 Using the above figures, calculate: 3.1 Total costs (2) 3.2 Average Costs (4) 3.3 Average Variable costs (4) 3.4 If the total cost for 25 units is R350 and the total cost for 30 units is R550, calculate the Marginal cost. (6) [16] QUESTION 4 List THREE characteristics of an imperfect market. [6] 6

8 QUESTION 5 Choose the correct term in brackets. Write only the term next to the question number ( ) in your answer book. 5.1 Value-added tax (VAT) is an example of (a direct/an indirect) tax. (2) 5.2 (Subsidies/direct taxes) are provided to both consumers and producers. (2) 5.3 (Subsidies/welfare grants) enable firms to supply a greater quantity of a good or service, thus lowering the market price. (2) 5.4 If the state imposes a price ceiling (maximum price), it ensures that the price of the good remains (below/above) a certain level. (2) [8] QUESTION 6 Use a diagram to analyse the effect of an indirect tax on a good or service. [16] [TOTAL: 70 marks] 7

9 Grade 10 ECONOMICS PRACTICE TEST THREE Marks: 50 QUESTION 1 Various possible answers are provided for each of the following questions. Write the letter only of the correct answer next to the relevant question number. 1.1 In the economic history of South Africa, the of economic development was characterised by subsistence farming and bartering. A B C pre-colonial era agricultural phase agricultural mining phase D industrial development phase. (2) 1.2 During the of economic development in South Africa, the VOC bought slaves from India, East Indies and Madagascar to work on their commercial farms and to work as gardeners, builders and carpenters. A B C pre-colonial era agricultural phase agricultural mining phase D industrial development phase. (2) 1.3 The first bank notes were issued in South Africa A in the early 1700s. B in the late 1700s. C before D after (2) 1.4 The first bank to be established in South Africa was A a private bank which only took deposits. B a government-controlled bank which only took deposits. C a private bank which lent people money to purchase land. D a government-controlled bank which lent people money to purchase land. (2) 8

10 1.5 The is defined as that proportion of the population, which is between 16 and 65 years of age and has the potential to be employed. A B C labour force participation rate economically-active population rate of unemployment D labour absorption rate. (2) [10] QUESTION 2 Choose an appropriate description from COLUMN B to match the concept in COLUMN A. Write only the letters (A H) to indicate your choice next to each question number ( ) in your answer book. COLUMN A COLUMN B 2.1 Characteristic of the traditional stage of economic development in Europe A The establishment of towns and the emergence of travelling merchants 2.2 Characteristic of the transitional stage of economic development in Europe B Industrial Revolution 2.3 Characteristic of the take-off stage of economic development in Europe C A severe lack of economic freedom and no specialisation of labour 2.4 Characteristic of the stage of economic maturity in Europe D Formation of labour unions 2.5 Characteristic of the period of mass production in the economic development of Europe E Approximately from 1200 to The duration of the transitional period of economic development in Europe F Mercantilism 2.7 The duration of the take-off period of economic development in Europe G Approximately from 1700 to The duration of the period of economic maturity in Europe H Approximately from 1000 to 1200 [16] 9

11 QUESTION 3 List the THREE most important characteristics of the pre-colonial era of economic development in South Africa. [6] QUESTION 4 List ONE item which was commonly used to barter with in Africa, prior to the introduction of notes and coins. [2] QUESTION 5 Choose the correct term in brackets. Write only the term next to the question number ( ) in your answer book. 5.1 Population growth leads to (an increase/a decrease) in the supply of labour. (2) 5.2 The difference between the birth rate and death rate is called the (infant mortality rate/natural growth rate). (2) 5.3 Population growth leads to (an increase/a decrease) in the demand for consumer goods. (2) 5.4 Urbanisation is the process whereby the population of urban areas (decreases/increases) as the result of migration. (2) [8] QUESTION 6 Choose the correct term in brackets. Write only the term next to the question number ( ) in your answer book. 6.1 Since 1970, the unemployment rate in South Africa has steadily (increased/decreased). (2) 6.2 The unemployment rate is the percentage of the (total/economically-active) population that is actively looking for work, but is unable to find employment. (2) 6.3 Population growth leads to (an increase/a decrease) in the supply of labour. (2) 6.4 Population growth leads to (an increase/a decrease) in the aggregate demand for consumer goods. (2) [8] [TOTAL: 50 marks] 10

12 Grade 10 ECONOMICS PRACTICE TEST FOUR Marks: 60 QUESTION 1 Various possible answers are provided for each of the following questions. Write the letter only of the correct answer next to the relevant question number. 1.1 When people are temporarily unemployed because they are moving between jobs, they form part of unemployment figures. A B C seasonal frictional structural D cyclical. (2) 1.2 If the demand for labour increases, there will be A an increase in the wage rate, but a decline in the level of employment. B an increase in both the wage rate and the level of employment. C a decrease in the wage rate and an increase in the level of employment. D a decrease in both the wage rate and the level of employment. (2) 1.3 Suppose both the demand for and supply of labour were to increase. This, would ceteris paribus, most certainly lead to A B C an increase in the wage rate. an increase in the level of employment. a decrease in the wage rate. D a decrease in the level of employment. (2) [6] 11

13 QUESTION 2 Choose an appropriate description from COLUMN B to match the concept in COLUMN A. Write only the letters (A H) to indicate your choice next to each question number ( ) in your answer book. COLUMN A COLUMN B 2.1 Labour unions A A group set up within an organisation to settle disputes between employers and employees 2.2 Workplace forums B Assists with disputes, which could not be resolved within an organisation 2.3 Bargaining councils C A group of workers from a specific sector, who organise themselves to promote their social, economic and political goals 2.4 Commission for Conciliation, Mediation and Arbitration (CCMA) D Legislation, which seeks to protect the rights of individuals in the workplace and promote collective bargaining 2.5 Labour courts E A body responsible for regulating labour practices and ensuring compliance with the Labour Relations Act 2.6 Basic Conditions of Employment Act F Legislation which seeks to promote the employees physical well-being 2.7 Labour Relations Act G Sets out minimum terms and conditions for employment 2.8 Occupational Health and Safety Act H A collection of employees within a business who meet to discuss labour issues at work [16] 12

14 QUESTION 3 Critically discuss the factors which contribute to high unemployment figures in South Africa. [16] QUESTION 4 List any THREE examples of legislation in South Africa, which seek to promote labour relations and workers rights. [6] QUESTION 5 Explain the difference between the Labour Relations Act and the Basic Conditions of Employment Act. [16] [TOTAL: 60 marks] 13

15 Grade 10 ECONOMICS PRACTICE TEST ONE MEMORANDUM QUESTION macro-economics (2) 1.2 micro-economics (2) 1.3 normative (2) 1.4 positive (2) [8] QUESTION 2 2 What, how, and for whom to produce? [6] QUESTION 3 3 [18] 14

16 QUESTION A: Business enterprises B: Households C: Households receive income (wages, salaries, rent and interest) D: Taxes (8) 4.2 The diagram shows a closed economy, because there is no foreign sector. (4) 4.3 Y = C + I + G + X M Y = R140 million + R20 million + R90 million + R10 million R40 million Y = R220 million (8) [20] QUESTION unemployment (2) 5.2 an appreciation (2) 5.3 boom (2) 5.4 boom (2) [8] [TOTAL: 60 marks] 15

17 Grade 10 ECONOMICS PRACTICE TEST TWO MEMORANDUM QUESTION C (2) 1.2 B (2) 1.3 C (2) 1.4 C (2) 1.5 B (2) 1.6 D (2) 1.7 C (2) 1.8 D (2) 1.9 C (2) [18] QUESTION 2 2 Brings buyers and sellers together. Allocates resources. Allows prices and quantities to be negotiated. [6] QUESTION 3 3 Worked answer 3.1 Total Cost = Fixed Cost + Variable Cost Total Cost = Total Cost = Average Costs = Total Costs / Quantity Average Costs = 750 / 15 Average Costs = Average Variable Costs = Variable Costs / Quantity Average Variable Costs = 500 / 15 Average Variable Costs = Marginal Costs = change in Total costs / change in Quantity Marginal Costs = ( ) / (30 25) Marginal Costs = 200 / 5 Marginal Costs = 40 [16] 16

18 QUESTION 4 4 Any THREE of the following: A single supplier ( ) Products are not homogenous (similar / identical) ( ) The seller is protected from competition no free competition ( ) Companies are given the rights to be the only operators in a country ( ) [6] QUESTION indirect (2) 5.2 subsidies (2) 5.3 subsidies (2) 5.4 below (2) [8] 17

19 QUESTION 6 6 Mark allocation for diagram The above diagram shows how imposing an indirect tax shifts the supply curve up and to the left (in effect decreasing the supply of the good ). This leads to a decrease in the quantity of the good being produced and an increase in the market price. [16] [TOTAL: 70 marks] 18

20 Grade 10 ECONOMICS PRACTICE TEST THREE MEMORANDUM QUESTION D (2) 1.2 B (2) 1.3 B (2) 1.4 D (2) 1.5 B (2) [10] QUESTION C (2) 2.2 A (2) 2.3 F (2) 2.4 B (2) 2.5 D (2) 2.6 H (2) 2.7 E (2) 2.8 G (2) [16] QUESTION 3 3 Any THREE of the following: The country was inhabited by the Khoi-San and African tribes ( ). Subsistence farming was the norm although some barter took place (using skins, livestock, food, pottery, tobacco and metal objects) ( ). Ivory and gold were traded (sometimes with individuals from other countries) ( ). In 1652, a Dutch shipping company (the VOC), established a halfway port and refreshment station in the Cape ( ). [6] 19

21 QUESTION 4 4 Any ONE of the following: cattle ( ) sheep ( ) goats ( ) indigenous grain ( ) [2] QUESTION increase (2) 5.2 natural growth rate (2) 5.3 an increase (2) 5.4 increases (2) [8] QUESTION increased (2) 6.2 economically-active (2) 6.3 an increase (2) 6.4 an increase (2) [8] [TOTAL: 50 marks] 20

22 Grade 10 ECONOMICS PRACTICE TEST FOUR MEMORANDUM QUESTION B (2) 1.2 B (2) 1.3 B (2) [8] QUESTION C (2) 2.2 H (2) 2.3 A (2) 2.4 B (2) 2.5 E (2) 2.6 G (2) 2.7 D (2) 2.8 F (2) [16] QUESTION 3 3 In South Africa, the following factors contribute to unemployment: Declining demand for consumer goods, which leads to a decreased demand for labour Increased mechanisation and a shift to capital-intensive production techniques, which leads to a decrease in the demand for labour Trade unions which drive up wage rates, and decreases the demand for labour An oversupply of skilled labour Rapid population growth A lack of investment, which results in a lack of new business opportunities and employment opportunities [16] 21

23 QUESTION 4 4 Labour Relations Act Basic Conditions of Employment Act Occupational Health and Safety Act [6] QUESTION 5 5 The Labour Relations Act sets out to protect the rights of individual workers by providing a mechanism for collective bargaining and the resolution of disputes. This Act seeks to promote consultation in the workplace. This is different from the Basic Conditions of Employment Act, which also seeks to promote individual worker s rights, but does so by stipulating certain standards and limits to protect workers, for example, from working long hours or being paid unfairly. Both Acts prevent exploitation, but in different ways. [16] [TOTAL: 60 marks] 22

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