Macro

Public sector

The public sector raises tax to fund government activity, including public goods that private sellers cannot easily charge for, and merit goods that society wants people to have.

CAPS

Grade 10 · Economics · Macro

Economics wants the concept, then the diagram or the data, then the consequence.

The papers
Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.
How to write it
Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.
How a marker reads it
A common mix-up is calling any government service a public good, when a hospital bed can be full, so it is rival and is better described as a merit good.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. On a corner in Khayelitsha a streetlight stays on after dark. Everyone who walks there can see, including a person who paid no rates, because the municipality cannot switch the lamp off for non-payers only. One extra walker does not dim it for the others. A private shop will not erect the pole, because it cannot collect a fee from each person who passes. Tax revenue pays for the pole and the bulb. The light is a public good. A loaf at the spaza on the same corner is not, because the shop can refuse anyone who does not pay.

More worked examples

Lusikisiki classroom
A no-fee school in Lusikisiki teaches children whose households could not pay full fees. Education can be sold by a private school, so it is not a pure public good, and a classroom seat can also fill up. Government still funds it as a merit good because the benefit to the child and the town is larger than the fee a poor household would manage. Tax is what keeps the teachers paid. The school is public support, not the same idea as a streetlight.
Simon's Town patrol
A naval patrol off Simon's Town protects ships in the area whether or not a particular trawler paid an extra fee that week. One more fishing boat does not use the patrol up. People who pay little tax are still covered, which is why defence is treated as a public good. A sandwich at a school tuckshop is the opposite: refuse to pay and you do not get it, and once it is eaten nobody else can have it. The difference is excludability and rivalry, not whether the thing is useful.

In ordinary words

A public good is non-excludable and non-rival: non-payers cannot easily be shut out, and one extra user does not use it up. Street lighting is the usual case, so a private shop struggles to send each passer-by a bill. A merit good, such as schooling or basic health care, can be sold, and a seat or a bed can fill up, but government still supports it because the wider benefit is larger than what a poor household would pay. Tax is how the revenue is raised, while private goods, such as a loaf, stay excludable because the seller can refuse a non-payer.

In South Africa

A lit corner in Khayelitsha stays bright for every walker, whether or not that walker paid rates.

Part 1 / 4

What it is

The public sector raises tax to fund government activity, including public goods that private sellers cannot easily charge for, and merit goods that society wants people to have.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Government revenue is R2 100 bn and spending R2 400 bn. Calculate the budget balance.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Government revenue is R2 100 bn and spending R2 400 bn. Calculate the budget balance.

Before any working — hunt first

Given

Numbers and units already in the sentence: R2 · 100 bn · R2 · 400 bn. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: the budget balance. Circle that word — that is the missing variable.

Find

We are required to find: the budget balance. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Balance = revenue − spending. Then substitute the given, one line at a time, to get the budget balance.

In other words — as if you have never seen this before

If you have never seen this before: Balance = revenue − spending. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Revenue and spending.

3. Which method — and why this one?

Balance = revenue − spending.

4. Step-by-step working

01 / 08
Step A — Read the question twice
Slow down. Circle the word that names the unknown. Underline every number and its unit. Do not grab a formula yet — first decide what the paper is actually asking.
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
02 / 08
Step A2 — Hunt: Given, Missing, Find, Calculate
Given: Numbers and units already in the sentence: R2 · 100 bn · R2 · 400 bn. Copy each one into a column. A name without a number is not given. Missing: After you copy the given, the letter that still has no number is missing. The paper is pointing at: the budget balance. Circle that word — that is the missing variable. Find: We are required to find: the budget balance. Write that as a symbol on the left, with a question mark, before you touch a formula. Calculate: What we need to calculate: Balance = revenue − spending. Then substitute the given, one line at a time, to get the budget balance.
Why this step: Do not name the letters yet. First hunt: what already has a number (Given), what has no number (Missing), the word the paper wants (Find), and which formula still contains the missing letter (Calculate).
03 / 08
Step B — Write the given in a column
Revenue and spending.
Why this step: A column with units stops you mixing cm with m, or minutes with seconds. Markers can also see you started correctly.
04 / 08
Step C — Name the method in words
Balance = revenue − spending.
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
05 / 08
Subtract
2 100−2 400=−R300 bn (deficit).
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
06 / 08
Step G — Sense-check the size
Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.
Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.
07 / 08
Step F — Box the answer with its unit
Budget deficit of R300 bn.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
08 / 08
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

Budget deficit of R300 bn.

Copy onto your answer sheet — in this order

Answer: Budget deficit of R300 bn.

6. Check it like a marker

Deficits are financed by borrowing.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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