EJC H1 Prelim 2024 QP

EUNOIAJUNIORCOLLEGEJC2PreliminaryExamination2024GeneralCertificateofEducationAdvancedLevelHigher1 ECONOMICSPaper1 8843/01 26August20243hours AdditionalMaterials:AnswerBooklet READTHESEINSTRUCTIONSFIRST Ananswerbookletwillbeprovidedwiththisquestionpaper.Youshouldfollowtheinstructionsonthefrontcoverof theanswerbooklet.If youneedadditionalanswerpaper, asktheinvigilatorforacontinuationbooklet. Answerallquestions. Thenumberofmarksisgiveninbrackets[ ] attheendofeachquestionorpartquestion. Thisdocumentconsistsof 7printedpagesand1blankpage. [Turnover

2 Question1: TowardsSustainableFashion Table1: Worldcottonproductionandconsumption(inmillionbales) Year Production Consumption2021 115 1182022 120 110 Source: USDAForeignAgricultural service, accessed30July2024 Extract 1: CottonpricestumbleasBrazil’sexportssurge Lowprices for corn have pushed farmers in Brazil to plant cotton instead of asecondcorncrop,resultinginasharpriseinproduction. Inrecent years,Brazil overtooktheUSastheworld’slargestcotton exporter. The South American country exported 12.4 million bales in the 2023-24 harvestseasoncomparedwith11.8millionbalesthatcameoutoftheUS,accordingtoestimatesbytheUSDepartmentofAgriculture.Australia,theworld’sthird-biggestexporter,shipped5.8millionbales. Brazil’s soaring output has morethanoffset theimpact of consecutiveyearsof drought intheUS.Meanwhile, global demand for cotton has fallen. Over the past few years, shoppers haveincreasingly opted for alternative fabrics like polyester and other man-made petroleum-basedfabrics, which are cheaper and quicker toproducethantoharvest cotton, but haveamuchlargerenvironmental toll. Source: Financial Times, 16July2024 Extract 2: Unfavourableplight of cottonfarmers Cotton has beenthemost consumedfibreinthetextileindustryuntil 2002whereit wasovertakenbypolyester.Cottonfarmingprovidesdirectlivelihoodsfor100millionhouseholdsin75countries,ofwhich 90%are located in lower-income countries. Anadditional 350millionpeoplesupport cottonfarming and basic processing by providing labour, transportation, ginning, baling, and storage.Cotton farming is essential totheglobal textilesector whichemploysaround25millionpeople, asabouthalfofall textilesaremadeofcotton. Farmers are at theendof alongandcomplexvaluechain, oftenreceivingthelowest priceswhilebearing high production costs. They are generally at a disadvantage when it comes to pricenegotiationsbecausetheylackaccesstomarketinformation.Inaddition,manysmall-scalefarmersdonot belongtofarmer organizations, whichleavesthemlittlebargainingpowerorinfluenceonthepricesoffered. Cotton farmers receive a small share of the retail price of a garment, not exceeding 10%. Smallcotton farmers earn the least compared to large and medium-sized farmers in many producingcountries. Some advocates argue that programs supporting farmers, such as establishing aminimumsupportprice,aredesirableforfarmers. Source: 2023Global market report, Cottonpricesandsustainability, 10July2023 8843/01 [Turnover

3 Figure1: PrivateFundingfor sustainablefashioninIndia($million) Source: BusinessToday, 10July2022 Extract 3: Aglobal hubfor sustainablefashion India istheworld’ssecond-largest producer of cotton, andanimportant sourcingcountryfor majorapparel and home furnishing global retailers. The textile industry, dominated by cotton fibre,accountsfor nearly60%of thetotal manufacturingandmorethan2%ofIndia’sGDP.Thesectorisa significant forex earner, accounting for $40 billion, equivalent to 12%of the total exportsof thecountry. India hasset anambitioustarget of $100billionfor cottonandtextileexportsby2025-26,amidgrowingdemandfor sustainablecotton.Thiswill requireenhancedintegrationofIndia’scottonsector intoglobal supplychains. Indiaisanimportant sourcingcountryformajorapparel andhomefurnishing global retailers. Furthermore, traditional supply chains havecomeunder thescanner ofglobal buyers due to sustainability concerns. A favourable environment is already being createdthrough massive promotion via government investment in sustainable farming through therepurposing of the National Centre for OrganicandNatural Farming, whichpromotesorganicandnatural farming. Becoming a global hub for sustainable fashion will benefit the Indian economy, which includesspurringgreenjobopportunitiesinthetextilesector. Sustainablefashionreferstoclothingthathasbeen made in a way that is mindful of the environmental issues in the fashion industry. Despitepost-CovideconomicrecoveryinIndia, therehasnot beencommensurateexpansioninproductiveemployment opportunities. Sustainablemanufacturinginvolvesawholelifecycleoftheproductandservice, of which research and development becomes very important. Furthermore, newtechnological developments have led to significant changes in the labour market, such that jobsrequiringhighskillshavebeenincreasingwhilethoserequiringlowskillshavebeencontracting. AdaptedfromTelegraphIndia, 5December 2022 Extract 4: Thechallengeof sustainablefashion Fast fashion may offer immediate affordability and trendy styles, but it perpetuates a cycle ofenvironmental degradation and ethical concerns. On the other hand, sustainable fashion thatcurrently tends to be less affordable aims to mitigate these impacts through ethical practices,technological solutionsandeco-friendlymaterials.TheNational ClimateChangeJournal (2018)lists 8843/01 [Turnover

4 textilemanufacturingasoneof themost pollutingsectorsoftheeconomy.Itemits1.2billiontonnesof greenhouse gases, which is more than international aircraft and maritime shipping combined.Withintensifyingadverseimpactofthefashionindustryintermsofcarbonemissionsandwateruse,theneedforashifttosustainablefashionisevident. As the sustainable clothing market inIndiagrowssteadily, it isfacedwithseveral challenges. Thebiggest challengesfor suchashiftconcernthesourcingofsustainablematerialsandtheproductionprocessitself.Manysustainablematerials,suchasorganiccottonandrecycledpolyesterfibres,canbe more expensive and harder to come by than traditional materials. Furthermore, sustainableproduction methods, such as using non-toxic dyes and reducing water usage, can also increasecosts. To produce sustainable clothing, companies must shift to a more deliberate productionprocess that prioritises quality over quantity, while harnessing the benefits of cost-savingtechnological solutions. In addition, consumer sentiment and demand are major challenges for fashion brands, as manyconsumers may not take into account of the benefits of sustainable clothing on the environment.The growth of India’s fashion industry, driven by an expanding middle class and strongmanufacturingsector, isexpectedtocontributetotheglobal fashionmarket,withtheIndianapparelmarket projected to reach $59 billionby2022. However, asignificant portionof India’spopulation,particularly those in the Gen Z demographic (those born since 1997), have grown up with fastfashionasthenormandmaynotbeconcernedabouttheneedforsustainablefashion. Measures have been taken by the government to actively promote environmentally friendlypractices across the value chain. For instance, policies to promote the use of technologicalsolutionshavebeenadoptedtoachievethesociallydesiredoutcomeinthemarket for sustainableclothing. AdaptedfromThestateof sustainabilityinthefashionindustry, 29August 2023 (a) UsingTable1,explainhowtheworldpriceofcottonwouldchangefrom2021to2022. [2] (b) Explain why cotton produced in Brazil is not likely to be a public good.[3] (c) WithreferencetoExtract 1andusingadiagram, explainhowachangeinonesupplyfactormight account for a rise in cotton production in Brazil.[3] (d) Using the concept of price elasticity of demand, discuss the view that ‘establishing aminimum support price in the cotton market is desirable for farmers’ (Extract 2).[8] (e) (i) WithreferencetoFigure1,explainhowonecomponentofaggregatedemandmightbeaffected by the change in private funding for sustainable fashion.[2] (ii) Comment onthelikelyimpact onunemployment inIndiaifthecountrydevelopsinto‘aglobal hub