Molly

• Demerit good


  A good that is considered harmful to society and is discouraged through government intervention
• Demerit good


  • Cigarettes
• Effective demand


  The amount of a product that consumers are willing and able to buy at a given price
• Rationing within the price mechanism


  The process of allocating scarce resources through the price system
• Cross-elasticity of demand


  The responsiveness of the demand for one good to a change in the price of another good
• Nominal value of national income

  The total value of all goods and services produced in a country, measured in current prices without adjusting for inflation
• The type of inflation illustrated in the diagram is cost-push inflation, where the aggregate supply curve has shifted from AS to AS1
• Marginal costs


  The additional cost of producing one more unit of a good or service
• Floating exchange rate


  An exchange rate system where the currency's value is allowed to fluctuate according to the foreign exchange market
• Possible reasons for an increase in consumption

  • Increase in disposable income
  • Decrease in interest rates
  • Increase in consumer confidence
• Productivity


  The efficiency with which inputs are converted into outputs
• Capital investment


  The purchase of physical assets, such as machinery, equipment, or buildings, to increase the productive capacity of a business
• New technology and innovation

  Can improve efficiency, reduce costs, and increase output in the charcoal production industry
• Possible reasons for the shortage of local labour supply in the charcoal industry in Namibia

  • Low wages
  • Unattractive working conditions
  • Lack of skills and training
  • Competition from other industries
• The benefits of internal economies of scale might be restricted in the charcoal industry due to the small and medium size of the businesses
• Namibian charcoal producers are price-takers

  They are unlikely to make supernormal profit in the long run due to the highly competitive global market
• Entrepreneurship


  The process of identifying and starting a new business venture, organising the necessary resources, and taking on the associated risks and rewards
• Entrepreneurship plays a crucial role in the modern economy by driving innovation, creating jobs, and promoting economic growth
• Candidates answer on the Question Paper in the spaces provided
• Write your Centre Number, Candidate Number and Name in the spaces at the top of this page and on all separate answer sheets used
• Write in dark blue or black pen
• You may use a soft pencil for any rough work, diagrams or graphs
• Do not use correction fluid
• Do not write in the margin For Examiner's Use
• You may use blank pages for working/when answers are crossed out and corrected
• Answer all questions
• The number of marks is given in brackets [ ] at the end of each question or part question
• You may use a non-programmable calculator
• Outline the meaning of scarcity
• Owners of resources in a market economy are private individuals
• Disadvantages of division of labour

  • Monotony and boredom
  • Lack of job satisfaction
  • Lack of flexibility
• Partnership


  Form of business ownership where two or more people share ownership and management
• Roles of an employer association

  • Represent employers in collective bargaining
  • Provide advice and support to members
• Collective bargaining


  Process of negotiation between employers and a group of employees to determine conditions of employment
• Cool drink launches successful new advertising campaign and firm introduces new technology to increase output


  New equilibrium price and quantity
• Real income


  Income adjusted for inflation
• Methods of advertising


  • Television
  • Radio
  • Newspaper
• Transfer payments


  Payments made by the government to individuals not in exchange for goods or services, e.g. welfare payments
• Formula to calculate productivity

  Output / Input
• Ways to increase worker productivity

  • Training and development
  • Improved working conditions