NJC H2 Economics Prelim P1 QP

This document consists of 8 printed pages. NATIONAL JUNIOR COLLEGE Economics Department © NJC 2023 9570/01/Aug/23 [Turn over ECONOMICS 9570/01 Paper 1 22 August 202 3 2 hour 30 minutes No Additional Materials are required. READ THESE INSTRUCTIONS FIRST An answer booklet will be provided with this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional answer paper ask the invigilator for a continuation booklet. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. NATIONAL JUNIOR COLLEGE SH2 Preliminary Examinations for General Certificate of Education Advanced Level Higher 2

2 © NJC 2023 9570/01/Aug/23 Answer all questions. Question 1: Changes in the coffee market Extract 1: Coffee beans price slump as consumers stay home over coronavirus fears The effects of the coronavirus (COVID-19) have spread to the world's coffee growers as consumers shun coffee shops and stay home. China is the biggest importer of coffee beans f rom Brazil, the world's largest producer and exporter of various coffee beans varieties including arabica and robusta. But the COVID-19 outbreak has caused a dramatic fall in demand, with Starbucks closing more than 2,000 outlets in China late January. The decision ‘will lead to a decline China's coffee consumption’, said a Japanese trader. Chinese consumers have warmed to coffee-drinking in recent years, with Starbucks opening outlets throughout the country and homegrown rival Luckin Coffee becoming increasingly popular . But the spread of COVID-19 is beginning to hinder that growth. ‘People have refrained from nonessential dining out due to COVID-19, resulting in a sharp decline in coffee consumption at cafes and restaurants.’ said Shiro Ozawa, adviser for Tokyo-based specialty coffee trader Wataru & Co. While coffee consumption is expected to decline globally, coffee-producing countries are forecast to have a record crop year due to favourable weather. Many research companies expect that Brazil will produce coffee beans that would exceed the record of 64.8 million bags of coff ee beans. Vietnam, the world's second largest producer and exporter of coffee beans varieties including arabica and robusta, is also expected to yield a healthy cr op in that period with the planting of new high yield varieties. Source: Nikkei Asia, 12 March 2020 Extract 2: Vietnam’s coffee farmers fear profit squeeze Almost all of the coffee grown in Vietnam is robusta, the bitter-tasting bean used in instant coffee, of which the Southeast Asian country accounts for about 40% of global output. Unli ke in Brazil – the second-biggest grower of robusta – most of Vietnamese producers are small scale farmers with farms in the Central Highlands – the country’s primary coffee gro