SAJC 2024 JC2 H1 Econs CSQ Prelims QP

This document consists of 9 printed pages and 1 blank page. © SAJC 2024 ST ANDREW’S JUNIOR COLLEGE Economics Department [Turn Over 8843/01/Aug/24 ECONOMICS 8843/01 Paper 1 23 Aug 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 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. St Andrew’s Junior College JC2 Preliminary Examinations for General Certificate of Education Advanced Level Higher 1

2 © SAJC 2024 8843/01/Aug/24 Answer all questions. Question 1: E-books - a tale of digital disruption, and the expansion of Integrated Resorts Extract 1: E-book prices and consumers’ willingness to pay more Electronic books, one of the representative digital goods, has recently come into wide use with the developments in technology and proliferation of mobile devices including smart phones, tablet PCs, and dedicated e -book readers like Kindle. As a result, th e e -book market has grown dramatically in the last few years alone. The perception of benefits and thus willingness to pay has increased over the last ten years, with the acceptable price premium for e-books rising significantly over that time span. It is all the more surprising that publishers do not tap into this potential. Figure 1: Average e-book price in Germany (€), 2010 to 2019 Source: statista.com, 11 December 2023 However, this trend of prices for e -books in the past years might be reversed in the future. According to the German industry association for booksellers, the average price level for e-books increased by 4.9 percent to 6.63 Euros in 2020, attributed to 'gross profiteering' from e -book publishers. These publishers trawled th rough university reading lists, identified the commonly used textbooks, classified them as essential and raised the price of these e-books. Source: Simon-Kucher.com, 9 March 2021 Extract 2: The high costs of e-books, and the knowledge it holds The way people choose to get lost in a book is changing, and it’s costing public libraries and the local governments that fund them a lot of money. To meet demands for these changes in literary habits, most public libraries have expanded their print collec tions to include digital versions of popular titles. However, not all library systems can afford to invest as much funding in digital books, with the amount a local government spends per capita on its library system varying dramatically. Citizens can only take heart that when knowledge is accessible through books, friends, or teachers, efforts to prevent people from learning are often ineffective. It is difficult to exclude people from gaining insight in, for instance, Newton’s theory of u niversal gravitation, once it has been discovered and publicised. Yet, this example refers only to the knowledge and formulae found in reading Newton’s Principia – not to the book itself which would be classified as a private

3 © SAJC 2024 8843/01/Aug/24 good, to be bought and sold on the market. Furthermore, unlike material things, the consumption of knowledge by one individual does not detract from that of another. One can use a piece of knowledge at the same time as others are learning about it without any loss of utility for either party. Source: Govtech.com, 15 June 2023 Extract 3: Public Libraries and the digital onslaught The National Library Board (NLB) nurtures readers for life, develops learning communities, builds a knowledgeable nation and encourages appreciation of Singapore’s history and heritage through a network of 26 public libraries. As part of the National Libra ry Board’s (NLB) ongoing efforts to systematically rejuvenate existing libraries, libraries are expanding and being slated for a revamp. In 2023, an operating budget of $308.01 million has been provided to NLB in for embarking on its functions, an increase from previous years. Though often underappreciated, libraries remain valuable to individuals and the communities they serve but sustained funding is crucial if they are to continue to be a vital part of the community. How much and how well a country invests in its resources and people often makes the difference between economic success and stagnation. Where there is strong commitment to human capital investment – for the broad majority of the population – skills and wages improve, along with living standards. This sees the emergence of a middle-class that supports consumption demand and in turn invests in educating the next generation. Investing in people is important not just for developing countries, but also for advanced economies pursuing the next bound of development. This overall picture in Singapore stands in stark contrast to some other countries which are struggling to get citizens to visit their public libraries. In the US, six in 10 residents reported they seldom or never visit their local public library. There, libraries have also recently been embroiled in a slew of disputes pertaining to funding cuts, censorship and copyright issues. The Build America’s Libraries Act would dedicate $5 billion to libraries nationwide and an estimated $105 million to Washington state for their modernization and renovation. The bill would pave the way for all communities to build back better, not just those with the most financial resources. Nevertheless, the high levels of debt held by the public in the United States can crowd out private investments in the economy, make it more difficult to respond to economic crises, and increase volatility within the economy. Source: Adapted from Channel News Asia, 24 November 2023 and Lee Kuan Yew School of Public Policy, 12 November 2023 Table 1: Singapore Government Revenue and Expenditure, Annual ($billion) Financial Year Total Revenue Total Expenditure 2023 130.71 134.29 2022 115.60 113.89 2021 103.50 101.63 2020 85.62 137.19 2019 91.31 90.47 2018 90.15 86.81 Source: Ministry of Finance, Singapore [Turn Over

4 © SAJC 2024 8843/01/Aug/24 Extract 4: Singapore begins second phase of integrated resort development In 2004, Singapore policymakers proposed a new tourism concept: the integrated resort (IR). An IR would include attractions like convention facilities, restaurants, shops, theatres and tourist destinations such as theme parks and aquariums. The IR concept allowed for the subsidy of US$10 billion to revive economic growth. These resorts have since become major tourist attractions, enriching the local economy by drawing both local and international visitors. Twenty years on, the economic impact of the 2 IRs has been transformative. They have not only increased Singapore's Gross Domestic Product (GDP) but also generated substantial revenue through tourism. Attractions such as Universal Studios Singapore and Adventure Cove attract valuable tourism dollars, while convention centers at M arina Bay Sands draw MICE (Meetings, Incentives, Conferences, and Exhibitions) visitors, a key tourist demographic for Singapore. This influx of tourists has led to an overall growt h in the local economy, benefiting Singaporeans through improved public services and reduced government debt. The Integrated Resorts have also created significant employment opportunities. According to figures from Channel News Asia in 2019, the resorts directly employ about 20,000 people, with more than 65 percent of these employees being locals. This job creatio n has helped lower the