2024 JC1 H2 Econs Final Exams Timed Trials QP

This document consists of 2 printed pages © SAJC 2024 ST ANDREWS JUNIOR COLLEGE Economics Department [Turn Over ECONOMICS 9570 2 hr 5 minutes READ THESE INSTRUCTIONS FIRST Write your name on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams or graphs. Do not use staples, paper clips, highlighters, glue or correction fluid. DO NOT WRITE IN ANY OF THE MARGINS. Answer all questions. At the end of the examination, fasten all your work securely together with the cover sheet. The number of marks is given in brackets [ ] at the end of each question or part question. St Andrews Junior College JC1 Timed Trials for General Certificate of Education Advanced Level Higher 2

2 © SAJC 2024 9570/Sep/24 Section A Answer all questions. Question 1: Worldwide semiconductor industry Figure 1: Lead time1 for semiconductor Source: Susquehanna Financial Group 1 A lead time measures the time taken to create a product and deliver it to a consumer. Extract 1: Global shortage of semiconductor The global semiconductor or computer chips shortage made worse by the coronavirus pandemic and supply chain issues shows no signs of improving as industries worldwide have had to halt production while waiting for processors. A report from the United States (US) Department of Commerce released this week revealed an “alarming” shortage of computer chips at a time when the median demand for them was as much as 17% higher in 2021 than 2019. “This is a major supply and demand mismatch,” the report stated. The consumer electronics market took off during the pandemic. Companies and their employees increased their purchases of desktops and laptops for home -office use, and consumers leaned into purchases of a wide variety of devices such as televisions, gaming systems, headphones, and other electronics equipment. In 2021, the dearth of computer chips forced car manufacturers to close down manufacturing and cut production by as much as 7.7 million cars; that, in turn, led to a massive car shortage just as some nations began lifting widespread quarantines, allowing people to travel again. The chip manufacturing is not instant. It takes three or four months to begin to manufacture a chip, let alone to have it ready to ship. Those chips then have to be embedded into the various systems that make up any given product, such as a car or its various subsystems — and that means shipping chips to Asia, where most product manufacturing occurs. Since the semiconductor shortage began, manufacturers increased plant production utilisation dramatically, operating at a rate of more than 90% utilisation of their facilities.

3 © SAJC 2024 9570/Sep/24 That high production rate is unusual because semiconductor machinery requires regular maintenance and uses massive amounts of power. The bottom line: th