The Consequences of Market Failures Economics Grade 12 Questions and Answers. Monopolists restrict output and charge higher prices compared to competitive markets. The reduced output and the higher price lead to a reduction in societal welfare, which is the deadweight loss
THE REASONS AND CONSEQUENCES OF MARKET FAILURES QUESTIONS AND ANSWERS GRADE 12
Activity 1
Study Figure 8.8 and answer the questions that follow.
- What economic technique for enumerating and evaluating is depicted in the illustration? (2)
- Give TWO recent examples of potential ‘operations’ in South Africa that will fit into the illustration. (2)
- List ONE social benefit of each of the above projects. (4)
[8]
Answers to activity 1
|
Activity 2
Distinguish between merit and demerit goods. [8]
Answer to activity 2
|
Activity 3
Discuss the features of collective goods. [8]
Answer to activity 3
|
Activity 4
Discuss the distribution of wealth and income as a consequence of market failure. [8]
Answer to activity 4
|
Activity 5
Study the following illustration and answer the questions that follow:
- Identify the negative externality depicted in the illustration. (2)
- List TWO measures that can be applied by government to reduce
this externality. (2) - What is the liability of the factory in this regard? (2)
- What effect will this have on consumer prices? (2)
[8]
Answers to activity 5
|