TMJC_2023_H2 EC_P2_Ans

TMJC JC2 H2 Economics 9570 2023 Prelim Exam Suggested Answers Essay Q1 The sharp increase in price of food in land-scarce Singapore could be attributed to the recent restrictions on export of food supply im posed by other countries and growing affluence. The Singapore government has implemented the ‘30 by 30’ plan which aims to produce 30 per cent of our nutritional needs by 2030. (a) Explain the reasons for the sharp increase in price of food in Singapore. [10] (b) Discuss whether the ‘30 by 30’ plan is likely t o be the most effective way the Singapore government can address the sharp increase in price of food. [15] Question Interpretation for part ‘a’: Command Word: “Explain”  Define, Illustrate, Elaborate with Economic concepts Cue Words/ Key Economic Concepts:  “sharp increase”  need to use PED or PES to explain  “increase in price of food”  link to DD and SS factors to explain why price of food increases  “Singapore”  context Requirement (1): DD reason to explain for an increase in price of food in SG Requirement (2): SS reason to explain for an increase in price of food in SG To score high L3  must use either PED or PES to explain for sharp increase in price of food Introduction Link to preamble:  The preamble states that there has been a recent b an or restrictions on export of food supply imposed by other countries and growing afflu ence which could contribute to the sharp increase in the price of food in Singapore. Definition of terms:  In this context, demand for food refers to the qua ntities of food that consumers are willing and able to purchase in a given period of time at various prices, ceteris paribus.  On the other hand, supply of food refers to the qu antities of food that suppliers are willing and able to sell in a given period of time at various prices, ceteris paribus. Answer the question:  Using demand and supply analysis, this essay seeks to explain the reasons for the sharp increase in price of food in Singapore.

TMJC JC2 H2 Economics 9570 2023 Prelim Exam Suggested Answers Body/ Development Using ISSUE framework as a tool of analysis: State initial equilibrium: Initially, the market for food is in equilibrium at the intersection of demand (D1) and supply (S1) at the equilibrium point E1. Explain one demand reason (Requirement 1): One possible reason for the increase in demand woul d be the growing affluence in Singapore. This suggests a rise in income levels an d hence purchasing power for an average Singaporean. Hence, demand for food increas es by less than proportionately, ceteris paribus, assuming food is a necessity and h ence YED value is positive and less than 1 (i.e., 0<YED<1). Demand curve will shift to the right from D1 to D2 by a smaller extent. This will lead to a rise in price of food. Explain one supply reason (Requirement 2): As mentioned in the preamble, there has been a rece nt restrictions on export of food