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)     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.     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)     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)     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)    

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)

1.3.4 A financial grant from the government to support the production of a particular product. (1)

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

Column A Column B 1.2.1 Cartel A Aircraft noise. 1.2.2 Explicit cost B Brands play a significant role in determining customer loyalty. 1.2.3 Output C The positive difference between total revenue and total costs. 1.2.4 Shut-down point D The actual expenditure of a business. 1.2.5 Negative externality E Where MC = AVC.   1.2.6 Profit F The number of units produced during a particular time. 1.2.7 Monopolistic competition G The value of inputs that the entrepreneur owns and uses in production. 1.2.8 Economic loss H When a group of producers form a collective monopoly.     I Where MC = MR.     J Average revenue is less than average cost. (8)

1.3.2 Products that are identical and standardised. (1)

1.3.3 A monopoly that exists because of high development costs. (1)

QUESTION 4 40 Marks 4.1.1 Name TWO kinds of inefficiencies that can exist in the imperfect market. (2) 4.1.2 Why does the government sometimes set price ceilings for certain products? (2)     4.2 Study the graph and answer the questions that follow: RIGHT CLICK ON THE BUTTON TO OPEN THE GRAPH IN A NEW TAB:     4.2.1 Mention what the individual firm would be experiencing at each of the price levels from A to D. (4) 4.2.2 Explain the term normal profit. (2) 4.2.3 Explain the shape of the AC-curve.  (4)     4.3 Study the extract and answer the questions that follow: FAST-FOOD RESTAURANTS IN THE MONOPOLISTIC COMPETITIVE MARKET South Africa’s fast-food market is extremely competitive, as many sellers fight it out for their share of the consumer market. The fast-food industry accounts for about 40% of the total consumer food-service sales in South Africa, e.g. Fishaways selling fish and Steers selling hamburgers. It is regarded as a hybrid market structure.     4.3.1 Why does branding play a major role in this market structure? (2) 4.3.2 Why will the economic profit made by a monopolistic competitor disappear in the long run? (4) 4.3.3 Discuss the hybrid market structure in detail. (4)     4.4 Explain why governments sometimes proceed with a project even if the private costs exceed the private benefits. (8) 4.5 With the aid of a graph, explain why marginal cost must be equal to marginal revenue for profits to be maximised. (8)    

1.1.1 The government can intervene to reduce the production and consumption of a demerit good …. (2)