NJC H2 Prelim 2024 P2 QP

This document consists of 3 printed page and 1 blank page. NATIONAL JUNIOR COLLEGE Economics Department © NJC 2024 9570/02/24 ECONOMICS 9570/02 Paper 2 2 hours 30 minutes 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 three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. The number of marks is given in brackets [ ] at the end of each question or part question. NATIONAL JUNIOR COLLEGE SH2 Preliminary Examination for General Certificate of Education Advanced Level Higher 2 Full name :______________________ Economics subject class :_ _________________

2 © NJC 2024 9570/02/24 Section A One or two of your three chosen questions must be from this section. 1 Lithium currently plays a significant role in the production of lithium batteries widely used in electric vehicles (EVs), but recent research into alternatives such as sodium- ion batteries could also enable their use in EVs. To encourage more consumers to purchase EVs in a push for environmental sustainability, some governments have introduced direct subsidies on EVs. Others are exploring to increase taxes on internal combustion engine vehicles (ICEVs). (a) With the aid of a diagram, explain a likely impact of a rise in the price of lithium on the overall consumer expenditure on EVs. [ 10] (b) Discuss whether government policies or advancements in battery technologies will have a greater impact on the market for EVs in the long run. [15] 2 A firm’s decisions and strategies are largely determined by the objectives of the firm. (a) Explain how a firm’s price and output decision might change if its objective changes from maximising profit to maximising its revenue. [10] (b) Discuss whether price discrimination is the best strategy for a firm to increase its revenue. [15] 3 Two possible reasons why markets may fail are public goods and positive externalities. (a) Explain two characteristics of public goods, and why markets might be allocative inefficient in the case of public goods.