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1.3.6 Something that the public sector will need to do in order to evaluate projects. (1)

QUESTION 3 40 Marks 3.1.1 Give any TWO examples of merit goods. (2) 3.1.2 How can the consumer benefit from competition? (2)     [4] 3.2 Study the graph and answer the questions that follow: RIGHT CLICK ON THE BUTTON TO OPEN THE GRAPH IN A NEW TAB:     3.2.1 Which imperfect market structure is illustrated above? (1) 3.2.2 Name the downward-sloping demand curve above. (1) 3.2.3 Discuss two ways in which collusion may take place in this market. (4) 3.2.4 What would the effect be on total revenue if this producer increased his price from R150 to R155? Show ALL calculations. (4)     [10] 3.3 Study the table and answer the questions that follow: COST AND REVENUE TABLE OUTPUT PRICE AR MR TR AC MC TC 1 21 21 21 21 23 24 23 2 18 18 15 36 19 15 38 3 15 15 9 45 15 7 45 4 12 12 3 48 14 A 56 5 9 9 -3 45 15 19 75   3.3.1 What is the effect on total revenue when marginal revenue is positive? (1) 3.3.2 At which output level will the firm achieve profit maximisation? (1) 3.3.3 Briefly explain the term marginal revenue. (2) 3.3.4 Determine the marginal cost for A in the above table. (2) 3.3.5 Explain why the MR-curve lies below the AR-curve. (4)     [10] 3.4 Draw a well-labelled graph to help in the explanation of economic profit for the monopoly market. (8) 3.5 Draw a well-labelled graph to help in the explanation of a positive externality stemming from consumption. (8)     [40]

1.1.3 Social costs consist of the sum of private and …. costs. (2)

1.3.5 The output increases by more than the percentage increase in inputs which results in a decrease in costs. (1)

1.1.2 In a perfect market, normal profit is also known as the …. point. (2)

    QUESTION 5 MARKET FAILURES     Introduction (2) Body   Discuss the causes of market failure in detail, without the use of any graphs. (26) With the use of a graph, explain how productive efficiency can be achieved in the market. (10) Conclusion (2) [40]   OR       QUESTION 6 MONOPOLY     Introduction (2) Body   Examine the market structure of a monopoly, without the use of any graphs. (26) Why has Eskom, as a monopoly, not achieved economic profit in the long run, as expected of a typical monopoly? (10) Conclusion (2) [40]

QUESTION 2 40 Marks 2.1.1 Name any TWO institutions in South Africa that regulate anti-competitive behaviour. (2) 2.1.2 What will happen if one firm in the perfect market decides to increase its selling price? (2)     [4] 2.2 Study the extract and answer the questions that follow: TOLL ROADS – WAS THIS THE BEST DECISION? There are major debates surrounding toll roads in South Africa, with many consumers unhappy and undecided whether it will really benefit the economy. The major question is whether the government has examined all the positives and negatives regarding toll roads. [Business Times]    2.2.1 What method can the government use to ensure that the introduction of toll roads is the best decision? (1) 2.2.2 What will be compared in this method? (1) 2.2.3 Why is the government compelled to use this method? (2) 2.2.4 How can toll roads lead to market failure? (2) 2.2.5 Argue in favour of the implementation of toll roads. (4)     [10] 2.3 Study the graph and answer the questions that follow: RIGHT CLICK ON THE BUTTON TO OPEN THE GRAPH IN A NEW TAB:     2.3.1 What is the visible relationship between the MC and AC curves? (2) 2.3.2 Define the term economic loss. (2) 2.3.3 Why is the demand curve of the individual producer perfectly elastic? (2) 2.3.4 Calculate the economic loss. Show ALL calculations. (4)     [10] 2.4 Explain how CALTEX can compete in an oligopolistic market with other petrol-selling companies in South Africa. (8) 2.5 What are the effects of the implementation of minimum wages in South Africa? (8)     [40]

1.1.7 A monopoly will maximise its revenue where marginal revenue is …. (2)

1.1.5 An example of monopolistic competition in South Africa is …. (2)

1.3.1 A market structure where only two businesses dominate the market. (1)