Revision Booklet – Learner Material

2024 Term 2
2

Dear Learner / Tutor:

The assumption is that learners know the content arlready, and that they
only need guidance on how to approach examination questions, how to
apply their knowledge and how to be more critical thinkers
Below is an extract from the current national examination Guideline
document, which you need to engage with throughout the sessions and
when you tutor or study.
Many middle and higher order questions are provided, and we would like you
to give yourselves ample opportunities to practise these but also, please
make some time at the end of the session to ask questions to your tutor on
various ‘muddy points’. Most of the session time will be spent on you
working through the learning material.
The material is examination focused and aims to deal with concepts dealt
with during Term 2, Micro-economics. The idea is that by now you are
preparing for both the Preliminary examinations and the end of year
examinations.
Features of higher-order questions:

➢ require you to engage with unrehearsed or unfamiliar contexts.

➢ ask for deep thinking.
➢ grounded in lower-order skills and linked to prior knowledge of subject
matter content.

Types of higher-order-thinking questions: (What? How? Why?) Analysis:

these questions ask you to dissect key information and analyse essential
concepts, themes and processes; for example:

➢ how is x related to y?
➢ what are the major reasons for?
➢ what is the impact of b on c?
➢ what is the problem faced by …?
➢ what is the main idea? theme?
➢ what are some of the problems of …?
➢ how is … similar to/different from …?
➢ why did … changes occur?

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Evaluation: these questions require learners to formulate and justify
judgements and criticisms based upon clearly-articulated evaluative criteria.
For example:

➢ provide a better solution for …?

➢ what are the consequences of …?
➢ what are the pros and cons of …?
➢ what are the alternatives for …?
➢ how effective are…?

Creativity/Synthesis: these questions require learners to formulate a

holistic summary of key ideas; provide an integrated, cohesive, sustained
response, make inferences; reformulate, reconstruct or create scenarios.
own voice is critical. For example:

➢ based on these facts, what predictions would you make?

➢ propose a solution to this problem.
➢ how can the errors be fixed?
➢ what alternative will you suggest …?

TO THE TUTOR:

Thank you for offering up your time and for sharing your skills and
experience with our learners. This will afford them with an opportunity to
improve their performance results considerably.

TO THE LEARNER:

Thank you for sacrificing your time to study the subject content. The idea
with this is to ensure that you succeed in getting through your Grade 12
academic year. Enjoy Economics!
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1. Study the graph below and answer the questions that follow.

1.1 Identify the marginal revenue curve in the graph above. (1)

1.2 Which curve is also known as the supply curve? (1)

1.3 Why will the individual firm not produce more than 60 units? (2)

1.4 How does the market demand curve differ from the curve of the individual firm? (2)

1.5 What is the significance of point A? (2 x 2) (4)

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2. Study the graph below and answer the questions that follow.

2.1 Identify the market structure in the graph above. (1)

2.2 Give the value of the market price depicted above. (1)

2.3 How will this equilibrium position change in the long run (long term)? (2)

2.4 What conditions must exist for this firm to shut down? (2)

2.5 Calculate the economic loss faced by this firm. (4)

3. Study the graph below and answer the questions that follow.
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3.1 Define the term marginal cost. (2)

3.2 Identify the point on the graph where the firm will shut down. (2)

3.3 Why will the firm shut down at the point identified in QUESTION 3.2? (2)

3.4 How is the supply curve of a perfectly competitive firm determined? (4)

4. Study the graph below and answer the questions that follow.

4.1 Provide the above graph with an appropriate heading. (2)

4.2 Which point indicates profit maximisation? (2)

4.3 How will price and quantity in this market structure change in the long run? (2)

4.4 Determine the total profit/loss made by this firm. Show ALL calculations. (4)

5. Study the article below and answer the questions that follow.

Pioneer apologises for anti-competitive behavior

Newly appointed Pioneer Foods Group chairperson Zitulele KK Combi on Monday vowed to “turn
a page” and commit to the principles of transparent, competitive behaviour and cooperate fully
with the regulators. Pioneer recently confirmed that it had received notification from the
Competition Commission that it had referred its investigation into the wheat milling market to the
Competition Tribunal for adjudication. Pioneer Foods is named as a respondent in the case
together with other industry participants.
The Competition Tribunal also imposed a penalty of R195-million on Pioneer Foods for its
involvement in a bread cartel and market dominance.
Speaking at a press conference in Cape Town, Combi said: “I will personally engage the
Competition Commission authorities to try to settle the matters amicably, if at all possible, and will
ensure that Pioneer Foods continues to cooperate fully with the regulators.
Source: Mail & Guardian – March 2010
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5.1 Name the institute in the extract that investigates anticompetitive behaviour in South Africa.
(1)
5.2 Identify ONE aspect that was influenced negatively by Pioneer Foods Group
anticompetitive behaviour. (1)

5.3 What is the role of the Competition Tribunal? (2)

5.4 What is meant by market dominance? (2)

5.5 How will Pioneer Foods Group anticompetitive behaviour affect the industrial sector? (4)

6. Study the graph below and answer the questions that follow.

6.1 How is profit calculated? (1)

6.2 Which profit does the firm earn at point B? (1)

6.3 Why is the TR curve starting at zero? (2)

6.4 When is profit maximised in the graph above? (2)

6.5 What are the implications of producing beyond point B? (4)

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7. Study the table below and answer the questions that follow.

7.1 In which run are the two firms operating? (1)

7.2 Give an example of a fixed cost. (1)

7.3 With reasons, identify a firm that will shut down. (4)

7.4 What, do you think, are the implications of a shutdown? (4)

8. Study the graph below and answer the questions that follow.

8.1 The above equilibrium position indicates a (short / long) run. (1)

8.2 Indicate the profit maximization point. (1)

8.3 Why will the monopolist produce at quantity 50 instead of quantity 60? (2x2) (4)

8.4 Calculate the profit or loss of this monopolist. Show ALL calculations. (4)
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9. Read the extract below and answer the questions that follow.

TRANSNET: MONOPOLY BEST IN ITS HANDS

Transnet, South Africa’s state transport company, defended its monopoly of the country’s
eight ports and said it would make no sense for private operators such as France’s Boll
ore SA to enter the market.
“We are sitting on natural monopolies as the ports don’t compete with each other”,
Transnet’s Chief Executive Officer said. “Is a natural monopoly better in private or state
hands?”
Source: www.iol.co.za/business/companies

9.1 Which service is Transnet offering? (1)

9.2 A monopoly can either be natural or … (1)

9.3 Differentiate between the natural monopoly and the one in QUESTION 2.3.2. (4)

9.4 How, in your opinion, are consumers affected by a monopoly? (4)

10. Study the graph below and answer questions that follow.

10.1 What type of market is represented by the graph above? (2)

10.2 Explain why the MR curve lies below the AR curve. (4)

10.3 Calculate the profit/loss of the above producer, and show all your calculations. (4)
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11. Study the table below answer the questions that follow.

11.1 For which market structure are these costs and revenues? (1)

11.2 At what level of output is the firm making normal profit? Give a reason
for your answer. (4)

11.3 Calculate the values of A–E. (5)

12. Study the graph below and answer the questions that follow.

12.1 Indicate the profit maximisation point of the monopolist. (1)

12.2 How many units will be produced at the maximisation point? (1)

12.3 Determine whether the business is making an economic profit or an economic loss.
Show ALL calculations. (4)

12.4 What favourable conditions may the monopolist enjoy in comparison to other market
structures? (4)
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13. Study the pictures below and answer the questions that follow.

13.1 Identify TWO barriers of entry as portrayed by the cartoon. (2 x 1) (2)

13.2 What type of monopoly is depicted in the above cartoon? (2)

13.3 Briefly describe the term monopoly. (2)

13.4 Why can’t a monopolist charge excessively high prices for his products? (2 x 2) (4)

14. Study the illustrations below and answer the questions that follow.

14.1 Identify the products produced by the businesses above. (1) 

14.2 Which market structure is depicted above? (1)

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14.3 Why will a new business find it difficult to enter into this type of market? (2)

14.4 What does interdependency of businesses in this market structure imply? (2)

14.5 Explain, without the use of a graph, why businesses in this industry will
be reluctant to decrease the price of their product. (2 x 2) (4)

15. Study the graph below and answer the questions that follow.

15.1 To which market structure is the kinked curve related? (1)

15.2 What is the output level in the graph above? (1)

15.3 What would the effect be on total revenue if the oligopolist increased his
price from R50 to R60? Show calculations. (4)

15.4 Advise the oligopolist on how to increase his market share in this industry. (2 x 2) (4)

16. Read the article below and answer the questions that follow.
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Competition Commission raids glass companies in collusion investigation.

The Competition Commission has begun an investigation into alleged collusive conduct
involving Glasfit, PG Glass, Shatterprufe and Digicall. This is typical cartel behaviour.

Shatterprufe allegedly supplied PG Glass and Glasfit with automotive glass, while Digicall
processed automotive glass-related insurance claims on behalf of PG Glass and Glasfit.

The investigation pertains to claims made by some independent glass fitment operations,
alleging that PG Glass carried out collusive activities preventing competition in the
automotive glass repair and fitment market.
[Adapted from www. bdlive.co.za, 23 March 2016]

16.1 Name the organisation that investigates anti-competitive behaviour of companies in South
Africa. (1)

16.2 What anti-competitive conduct was investigated, according to the extract? (1)

16.3 Briefly discuss the term cartel. (2)

16.4 What corrective measures can be instituted against these companies if they were found
guilty? (2)

16.5 How can the collusive behaviour of these glass companies affect the economy? (2x2) (4)

17. Study the extract below and answer the questions that follow.

THE IMPACT OF OLIGOPOLIES ON THE ECONOMY

The pharmaceutical industry is becoming an oligopoly due to the staggering costs of
developing and marketing new drugs and because of patents that protect new products
from competitors. It can cost more than R1 billion to develop a new drug, get it approved by
the Food and Drug Administration and bring it to market, according to Forbes
magazine. With those kinds of upfront costs, only a handful of companies, including Pfizer,
Merck and Novartis, can afford to create and sell new products. The government grants
those companies extended patents on their drugs, and these patents protect drug
developers from competitors for many years.
The smartphone market is similarly dominated by a handful of companies, the most
powerful two being Google Android and Apple. These companies have deep relationships
with the handset providers and are able to have their systems pre-installed on each phone.
As with computer operating systems, these relationships become self-reinforcing as they
grow. [Adapted from Business Report, October 2014]

17.1 Which type of industries mentioned in the extract are said to be oligopolistic?(2 x 1)(2)

17.2 Define the term oligopoly. (2)

17.3 Why it is important for these companies to have trademarks for their products? (2)
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17.4 How do cartels and price leadership differ in terms of the way prices are manipulated?
(2 x 2) (4)

18. Study the graph below and answer questions that follow.

18.1 Identify the maximum price from the graph. (1)

18.2 Which quantity will be supplied when the maximum price is enforced? (1)

18.3 Which role does the government play in redistribution of wealth? (4)

18.4 How will the maximum price affect the economy? (4)

19. Study the graph below and answer the questions that follow.
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19.1 Identify the price of cigarettes before a tax was imposed on it. (1)

19.2 What quantity is demanded after the government imposed a tax on cigarettes? (1)

19.3 Clearly distinguish between merit goods and demerit goods. (4)

19.5 Use the graph above and explain how a tax on cigarettes will reduce market failure. (4)

20. Study the cartoon below and answer the questions that follow.

20.1 Which cause of market failure is illustrated above? (2)

20.2 Briefly describe the term market failure. (2)

20.3 How can labour as a factor of production become more mobile? (2)

20.4 How does the South African government attempt to solve the problem of income
inequality? (2 x 2) (4)
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21. Study the information below and answer the questions that follow.

21.1 Identify any TWO sectors in South Africa where minimum wages are applied in the
extract above. (2 x 1) (2)

21.2 Briefly describe the term minimum wage. (2)

21.3 What is the advantage of having a national minimum wage instead of a minimum
wage per sector? (2)

21.4 Refer to the graph above and explain the implication of the R3 500 minimum wage
imposed by the government. (2 x 2) (4)

22. Study the information below and answer the questions that follow.
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22.1 In the information above, who is more likely to use a CBA when making decisions?(1)

22.2 Identify ONE project in the data above that the government is considering for this
community. (1)

22.3 Give a reason why a CBA will NOT be of use to the mechanic in the cartoon. (2)

22.4 According to the data above, which project would be best for the community? (2)

22.5 Why do you think it is important to do a CBA when deciding about large projects? (4)