2023 Econ Grade 11 p2 Nov MG
2023 Econ Grade 11 p2 Nov MG
GRADE 11
ECONOMICS P2
NOVEMBER 2023
MARKING GUIDELINES
MARKS: 150
SECTION A
QUESTION 1
1.1.1 B - relative✓✓
1.1.3 C - variable✓✓
1.1.4 D - comfort✓✓
1.1.6 B - ecosystem✓✓
1.1.7 C - externalities✓✓
1.1.8 D - parastatals✓✓
(8 x 2) (16)
1.2.1 I - It exists when buyers and sellers meet to negotiate the exchange of
prohibited/illegal goods✓
1.2.3 A - An increase in the price of these goods do not influence their demand
because they are used for survival✓
1.2.4 G - The purchase of an asset in another country such that it gives direct
control to the purchaser over the asset✓
1.2.6 C - Products that are so similar that they can be used instead of the
original good✓
1.2.7 B - The sustainable use and management of both renewable and non-
renewable resources to ensure that they are available for use for future
generations. ✓
1.2.8 E - A grouping of countries to get more control over the global economy✓
(8 x 1) (8)
1.3.3 Quotas ✓
1.3.4 Biodiversity ✓
(6 x 1) (6)
SECTION B
QUESTION 2: MICROECONOMICS
• services of a labourer ✓
• electricity ✓
• telephone bills ✓
• water accounts ✓ (2 x 1) (2)
(Accept any other correct relevant answer)
2.2.1 Give an example of a product that can be used together with tea.
• Sugar ✓
• Milk ✓ (1)
(Accept any other correct relevant answer)
Q✓ (1)
• It will make the producer to know how the price of one item
might affect the demand for another. ✓✓
• It will also help the producer to know how changes in prices of
related goods will affect a business in terms of profits and (4)
production. ✓✓
(Accept any other correct relevant answer)
0✓ (1)
20 x 2 = 100✓✓ (2)
(4)
2.4 Briefly discuss the relationship between factor market and product
market.
[40]
• Germany✓
• Australia✓
• Canada ✓
• Russia✓ (1)
• Mexico✓
It refers to the gap between the developed (north) countries and the
less developing (south) countries in terms of development and (2)
wealth. ✓✓
( Accept any other correct relevant answer)
3.3.5 Suggest ways in which citizens of the country can avoid cholera
related diseases.
3.4 Differentiate between the North and South in terms of economic growth
and life expectancy.
North South
Economic Growth Due to advanced There is low economic
technology, developed growth due to poor
countries are able to technology. ✓✓
produce more goods
and services hence and
increase in economic
growth ✓✓
Life Expectancy People in developed Life expectancy in
countries live longer developing countries is
due to the availability of low due to problems
health services. ✓✓ such as malnutrition,
Life expectancy in disease and ill health.
developed countries ✓✓
high is 75 years. ✓✓ Life expectancy is 48
years. ✓✓
(2 x 2 (4) (2 x 2 (4) (8)
[40]
• Elastic supply✓
• Inelastic supply ✓
• Unit price elasticity (Unitary supply) ✓
• Perfect inelastic supply ✓
• Perfect elastic supply✓ ( 2 x 1) (2)
Q✓ (1)
Price elasticity of demand is more elastic in the long term than in the
short term because consumers have more time to adjust to a change (2)
in price✓✓
(Accept any other correct relevant answer)
(4)
4.3.1 Name the sector that has recently been affected by global
warming.
(1)
Agricultural sector / Farming ✓
4.4 Briefly discuss the nature of the product as one of the factors that
determine price elasticity of demand.
• The price elasticity of demand for essential products such food tend to
be inelastic. ✓✓
• Those products are important and we need them to survive. ✓✓
• As a result, consumers will keep on buying them regardless of price
changes✓✓
• The price elasticity of demand for luxury products such as
entertainment tents to be elastic. ✓✓
• These products are not essential for survival so they are sensitive to
price changes. ✓✓ (8)
(Accept any other correct relevant answer)
[40]
SECTION C
QUESTION 5: MICROECONOMICS
INTRODUCTION
Monopoly exists when there is only one seller of a product, with no close
substitutes and entry into the market is completely blocked. ✓✓ Max (2)
(Accept any other correct relevant answer)
MAIN PART
Number of sellers✓
• There is a large number of buyers and sellers. ✓✓
• One seller will not be able to influence the price by withholding goods to
increase the price. ✓✓
Availability of information ✓
• Perfect knowledge of market conditions prevail in the perfect market. ✓✓
• Buyers and sellers are aware of all information that is required for the
market to function effectively ✓✓e.g. prices, supply and demand. ✓
Factors of production ✓
• All factors of production are completely mobile. ✓✓
• Labour, capital, and other factors of production can move freely from one
market to another. ✓✓
Collusion ✓
• There is no collusion between sellers. ✓✓
• Each seller acts independently of others ✓✓
Prices ✓
• Sellers are price takers and do not have control over prices. ✓✓
• Prices are determined by the market forces of demand and supply. ✓✓
Characteristics of monopoly
Number of producers ✓
• The monopolist is the only seller in the industry and has full control over the
supply of a product ✓✓
• It represents the total industry, with complete market power✓✓ e.g. De
Beers, Eskom ✓
• This enables the monopolist to exert considerable influence over the buyer
Profit ✓
• The monopoly makes a short-term normal and economic profits in the short
run ✓✓
• In the long run, it is more likely that the massive market power and high
prices will ensure that it makes supernormal profits ✓✓
Technical superiority ✓
• A monopoly has a technical advantage over potential competitors ✓✓
• Its access to resources and technical superiority makes it difficult for others
to compete ✓✓
• This can keep the monopolist in its position for some time, for example in
the computer software industry ✓✓
Favourable circumstances✓
• Sometimes entrepreneurs may enjoy favourable circumstances in a certain
geographical area ✓✓
• E.g. there may be only one supplier of milk, a hardware store or hotel in a
particular town ✓
• There may even be laws that protect the market, ✓✓e.g. post offices in
South Africa✓
Market information ✓
• A monopoly has full knowledge of all the current market conditions because
it is the only seller available in the market representing the industry as a
whole. ✓✓
• New firms that wish to enter the market will not have the same information
available to them and this hampers their ability to enter the market✓✓
• Monopolies withhold information from consumers as such it is difficult for
them to make informed decisions as they may not be fully aware of the
needs of consumers ✓✓
Exploitation of consumers✓
• The monopolist may produce fewer products at a higher price compared to
businesses under perfect competition ✓✓
• E.g. De Beers, because the monopolist is the only producer of the product
in the market, there is always the possibility of consumer exploitation. ✓✓
• Most governments take steps to guard against such practices and new and
existing monopolies are usually well monitored ✓✓
Market entry✓
• Entry in the market is completely blocked and it is impossible for other
businesses to enter the market ✓✓
• Some monopolies are created by law passed by the government giving one
firm exclusive right to produce a particular product ✓✓
• Government can use patents, licences and copyrights to restrict market
entry preventing undesirable or incompetent firms from entering the
market ✓✓
• The barriers prevents other producers from entering the market to supply
the same type of product ✓✓
• High start-up costs include capital investment and research and
development that could be difficult for other firms to afford ✓✓
Economies of scale ✓
• The mere size of the large business gives it a cost advantage over a
smaller rival and this will make it impossible for the smaller business to
compete ✓✓ (Max 26)
ADDITIONAL PART
CONCLUSION
In the real world, perfect markets are really rare to find but they serve as a
benchmark for the imperfect markets. The existence of monopolies create
problems such as unfair competition and higher prices in the market. ✓✓ (2)
(accept another correct relevant answer)
INTRODUCTION
MAIN PART
Causes of globalisation
Development of technology ✓
• Globalisation has been made possible, in part by technological
innovation.✓✓
• Over the past two decades, improvement happened in computer technology
and the application of computers. ✓✓
• This application of computers, utilising all their abilities, is known as
information technology. ✓✓
Trade liberalisation✓
• Trade liberalisation is the removal or reduction of trade barriers between
countries, ✓✓ e.g. import duties. ✓
• The purpose of trade liberalisation was to stimulate international trade ✓✓
• It started after World War II with the establishment of GATT by the United
Nations. ✓✓
• GATT members negotiated for the removal of trade restrictions and barriers
as well as to find methods of increasing international trade. ✓✓
• This role was taken over by the WTO in 1994. The WTO ensures that trade
agreements between countries are honoured and acts as a mediator in
trade disputes. ✓✓
• Removal of trade restrictions are aimed at encouraging foreign direct
investment to further develop industries and increase consumers’
purchasing power. ✓✓
• The outflow of these actions was the formation of export processing zones
(EPZs) by many countries in which no trade tariffs were levied. ✓✓
• Through trade liberalisation, some countries formed free trade areas (FTA),
where agreements were reached whereby participating countries remove all
trade barriers among themselves on goods/services traded. ✓✓
• The effect of an FTA is that the total volume of trade has increased
because countries can specialise in the products they produce the
cheapest. ✓✓
Capital liberalization ✓
• The financial markets were also liberated. As exchange and investment
controls were removed, capital was allowed to be traded in international
markets. ✓✓
• This allowed capital to move where it earned the highest returns. Investors
can move capital directly for portfolio investment and foreign direct
investment, without the intermediation of banks or monetary authorities. ✓✓
• Capital account liberalization in developing countries reduces the cost of
capital, temporarily increases investment, and permanently raises the level
of GDP per capita✓✓
Multinational enterprises✓
• Multinational enterprises are companies that establish manufacturing,
servicing and trading businesses in several countries. ✓✓
• When they produce goods/services in another country, they do not have to
export to that country, so they save in transportation costs. ✓✓
• They facilitate FDI as well as the migration of specialised labour when it is
not available in the foreign market. ✓✓
• They also play a major role in distributing and implementing new
technologies. ✓✓
• MNEs are companies that deliver products and services in at least two
countries. ✓✓
• They produce products in several countries where the costs of production is
the lowest and then distribute the products globally. ✓✓
• MNEs expose countries to international products which promotes
globalisation through international trade. ✓✓
Standardisation ✓
• Refers to making rules the same all over the world, making it easier for
countries and businesses to trade and invest internationally. ✓✓
• Those who are subjected to the rules behave in a similar manner which
promotes globalisation. ✓✓
• Globalisation was promoted by a number of facilitating rules, procedures
and norms that were laid down by international institutions. ✓✓
• Examples of such rules include, trade relations, investments, health
matters, labour and environment. ✓✓
ADDITIONAL PART
CONCLUSION