ST ANDREWS JUNIOR COLLEGE PRELIMINARY EXAMINATION - 2007

ECONOMICS
Higher 2 Paper 2 Essays

9732/02

11 September 2007 2 hours 15 minutes

Additional Materials: Writing paper

READ THESE INSTRUCTIONS FIRST

Write your Centre number, index number and name on all the work you hand in. Write in dark blue or black pen. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question.

This document consists of 3 printed pages and 1 blank page.

SAJC 2007 [Turn Over

Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 Gadget-crazy Singaporeans kept the cash registers at the IT Show ringing over the weekend, as vendors raked in combined sales of S$48 million - a record in the shows 16-year history. Source: TODAY Online, Mediacorp Press, 12 March 2007 (a) (b) Explain the benefits to a vendor participating in the IT show. [10]

Discuss the usefulness of elasticity of demand concepts to a vendor in the IT show. [15]

2 In 2005, movie tickets in Singapore were priced around $7.00 on weekdays and $9.50 on weekends. There were also price differences among different cinemas. Golden Village charged $7.00 whereas Cathay Cineplex charged $6.50 and Princess Theatre (an independent neighbourhood cinema) charged $5.00 on a weekday. (a) Discuss whether the above pricing strategies were examples of price discrimination. [12] How far would price discrimination be beneficial to a movie operator such as Cathay Cineplex and its consumers? [13]

(b)

3 In July 2007, Singtel started offering cable channels in a bid to end Starhubs monopoly. Discuss whether such a move is desirable for the Singapore economy. [25]

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Section B One or two of your three chosen questions must be from this section.

4 Oil prices have currently surged back to levels close to last years record high of US$74.92. Some industry experts expect that in the foreseeable future, there might be a further increase in oil prices to US$100. (a) Analyse the possible consequences of a rise in oil prices on oil-importing countries. [12] What, in your view, is the likely trend in future oil prices? [13]

(b)

5 In 2003, several countries throughout the world were hit by a disease called Severe Acute Respiratory Syndrome (SARS). Singapore also experienced considerable social and economic disruption during this time. Adapted from UCLES, S Paper, November 2005 (a) Explain the macroeconomic impact of the SARS outbreak on Singapore. [10] Discuss possible policies that Singapore can adopt to alleviate the adverse effects of the SARS outbreak. [15]

(b)

6 (a)

Explain the benefits of free trade to an economy. Is it justifiable for a developing country to practise protectionism?

[8] [17]

(b)

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BLANK PAGE

Copyright Acknowledgements:

Question 1 Question 5

TODAY Online, Mediacorp Press, 12 March 2007 UCLES, S Paper, November 2005

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