RI H2 Prelim 2024 Examiner's Report

ECONOMICS Higher 2 Syllabus 9570 Examiner’s Report Year 6 PRELIMINARY EXAMINATION 2024 Raffles Institution Nurturing the Thinker, Leader & Pioneer TEL: 65 6419 9888 ● FAX: 65 6419 9898 http://www.ri.edu.sg ● One Raffles Institution Lane, SINGAPORE 575954

Y6/9570/Prelims/2024 2 © RI 2024 [Turn Over ECONOMICS Y6 H2 Preliminary Examination 2024 Paper 9570/02 Paper 1 & 2 Case Study 1: Oral Health Situation in Indonesia and Brazil (a) With reference to Tables 1 and 2 and using a relevant elasticity of demand concept, explain the change in sugar consumption in Indonesia between 2013 and 2017. Correct identification of trend: • There has been an increased consumption of sugar [per capita] along with an increase in GDP per capita. [1m] Explanation of trend using YED concept: • It may be inferred that YED for sugar is positive and sugar is a normal good. As income increases as inferred from the increase in GDP per capita, the demand for sugar increases, ceteris paribus, the quantity of sugar consumed increases [1m] Examiners’ comments: • Generally, well done. Some candidates have identified that sugar is a necessity. This is awarded full credit as it is supported by the data. • However, some candidates incorrectly stated that sugar is a luxury good which is not supported by the data in Tables 1 and 2. [2] (b) Using a demand and supply diagram, explain how growing awareness towards oral care has led to the sharp increase in price of private dental care. • Accurate diagram: Rightward shift of DD curve, price inelastic SS curve [1m] • Correct explanation that DD increases [1m] • Brief explanation of price adjustment process [1m] • Use of PES concept to explain the sharp increase in price[1m] Explain demand factor: • As awareness regarding oral care has grown, more people are seeking routine check -ups and preventive care. • Change of taste and preferences towards seeking preventive oral care, this increases the demand for dental services. Briefly explain the price adjustment process: [4]

Y6/9570/Prelims/2024 3 © RI 2024 [Turn Over • Given the increase in DD, shifting DD curve from DD0 to DD1 at the prevailing price level, P0, a shortage is created as Q d less than Qs  upward pressure on price to clear the shortage and restore equilibrium at price P1 DD/SS diagram to illustrate: Apply PES concept: • However, SS is likely to be price inelastic, due to the long-time period needed to train dental staff in the provision of dental care services. • Evidence: [Ext 1, para 2] “ specialised dental procedures that require additional training for dental staff often take a longer time” OR [Ext 2, para 2] “This is challenging given that the process of becoming a dentist involves extensive education and training” • Suggests that quantity supplied of oral health services less responsive to price increases  sharp increase in price