VJC 2024 H1EC Prelim 8843 QP (23 Aug) Print

VICTORIA JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2024 HIGHER 1 ECONOMICS 8843/01 Paper 1 9 September 2024 3 hours 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 writing 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. This document consists of 8 printed pages. [Turn over

2 Victoria Junior College 8843/01/PE/24 Answer all questions Question 1: Inequality and sustainability in the age of AI Figure 1: Average selling price of Graphics Processing Units, 2019 – 2022 (US$) Source: PCgamer.com, 13 September 2022 Extract 1: Are GPU prices set to rise again in 2023? Graphics Processing Units (GPUs) prices are always a contentious issue. During the COVID- 19 pandemic, GPU prices rose dramatically as production was slashed, shipping was delayed, and supply chains were disrupted. T hose forced to stay home also decided to buy better gaming and crypto -mining hardware. Since then, prices have dropped, although the introduction of GPUs starting from a high US$1,600 per unit has somewhat warped the market. There are now reports that GPU prices are set to wobble once more. Adapted from makeuseof.com, 15 August 2023 Extract 2: Nvidia claims breakthrough in semiconductor production speed Nvidia says it has unlocked a way for the tech industry to produce next -generation semiconductors used in the production of GPUs at a faster rate with less energy costs. The GPU maker has developed a way to streamline a key part of the semiconductor production process known as lithography. Lithography essentially involves using light to create the intricate patterns on a silicon wafer to form the microscopic transistors. Nvidia is introducing “cuLitho,” a software library the company says can speed up computational lithography up to 40 times. A small portion of an Nvidia H100 enterprise GPU currently takes two weeks to process using existing technology. With cuLitho, a chip maker would only need a single eight- hour shift. Source: pcmag.com, 21 March 2023 Extract 3: Researchers on the way to creating alternative to GPUs Computer scientists from Rice University, along with collaborators from Intel, are developing a more cost-efficient alternative to GPU. The new algorithm is called “sub-linear deep learning engine” (SLIDE), and it uses general -purpose central processing units (CPUs) instead of 0 200 400 600 800 1000 1200 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Average Selling Price Over Time

3 Victoria Junior College 8843/01/PE/24 GPUs, and without specialised hardware. The development of SLIDE can potentially bring about many benefits in the artificial intelligence (AI) sphere, not only at a lower cost and in less time, but also without the need to rely on GPUs. Adapted from Unite AI, 9 December 2022 Extract 4: Semiconductor production – growth that is not green In addition to their strategic importance, semiconductors are South Korea's No. 1 export – worth $128 billion in 2021 and accounting for roughly 20 per cent of all industrial activity. The environmental costs of South Korea's semiconductor boom are considerable. In South Korea, the investment is concentrated in the country's central region, across a landscape of rivers and lakes that provide much of the densely populated capital area's drinking water. The industrial hub also straddles the Baekdudaegan, a mountain range that runs up the Korean Peninsula like a spine and acts as a habitat for wildlife. Vast amounts of industrial wastewater are flowing into public waterways around the clock. Concerns about sustainability have become more pressing throughout the semiconductor industry as the scale of investment becomes greater. Amid the global turn toward environmentally friendly forms of production and growing sensitivity among consumers, chipmakers are set to face both direct and implicit forms of pressure to operate cleanly. Samsung Electronics says it is doing everything possible to minimi se the amount of wastewater discharged from its factory and to treat the water to remove contaminants before it is released. The semiconductor industry is also often associated with air pollution. Samsung Electronics developed a Regenerative Catalytic System that treats processed gas with a specific catalyst to minimise carbon emissions at production sites. "We aim to keep developing innovative technologies that can contribute to reducing car bon, treating pollutants, recycling water, and managing waste," the company continued. "We believe technology to be the bridging solution between carbon reduction and growth.” Source: Nikkei Asia, 14 December 2022 Extract 5: Automation and the minimum wage According to a new academic research study, automation technology has been the primary driver in U.S. income inequality over the past 40 years. The report, published by the National Bureau of Economic Research, claims that 50 to 70 per cent of changes in U.S. wages since 1980 can be attributed to wage declines among blue -collar workers who were replaced or degraded by automation. Artificial intelligence, robotics and new sophisticated technologies have caused a wide chasm in wealth and income inequality. It looks like this issue will accelerate. For now, college - educated, white-collar professionals have largely been spared the fate of degreeless workers. Management consulting giant PriceWaterhouseCoopers reported, “AI, robotics and other forms of smart automation have the potential to bring great economic benefits, contributing up to $15 trillion to global GDP by 2030.” However, it comes with a high human cost. “This extra wealth will generate the demand for many jobs, but there are also concerns that it could displace many existing jobs.”

4 Victoria Junior College 8843/01/PE/24 Concerns of new technologies disrupting the workforce and causing job losses , have been around for a long time. On one side, the argument is automation will create new and better jobs and erase the need for physical labo ur. The counterclaim is that people without the appropriate skills will be displaced and not have a home in the new environment. For those who may be left behind, there have been calls to raise the minimum wage. As with the general public, economists fall on both sides of the minimum wage issue. Proponents of a minimum wage argue that increasing the wage would improve the lives of low-income workers, making it easier for them to afford food, rent, and other necessities. Opponents argue that the policy might hurt the very group of people it intends to help, by reducing the number of low - skilled jobs. Ultimately, the AI trend has the potential to adversely impact all classes of workers – even well-trained and experienced doctors will be pushed aside by sophisticated robots that can perform delicate surgeries more precisely and read x -rays more efficiently . Truck and cab drivers, cashiers, retail sales associates and people who work in manufacturing plants and factories have and will continue to be replaced by robotics and technology. Driverless vehicles, kiosks in fast-food restaurants and self-help, quick-phone scans at stores will soon eliminate most minimum-wage and low-skilled jobs. Sources: Forbes, 14 April 2022, and Federal Reserve Bank of St. Louis, November 2021 Questions (a) (i) Describe t