NYJC 2024 Prelim H1 Econ QP

NANYANG JUNIOR COLLEGE 2024 JC2 Preliminary Examination H1 ECONOMICS Paper No: 8843 /01 28 th August 202 4 Time : 0800 - 1100 hrs Wednesday Duration : 3 hours 00 min INSTRUCTIONS TO CANDIDATES Do not turn over this paper until you are told to do so. Write your name, class and the name of your Economics tutor in the space provided on the answer booklet. You are required to answer ALL questions. The number of marks is given in the brackets at the end of each part question. Write your answers on the answer booklet provided. If you use more than one answer booklet, slot the additional booklets into the first booklet. Please start each case study on a fresh page. You are advised to spend several minutes reading through the questions and data before you begin writing your answers. There are 8 printed pages including this cover page.

2 JC2 H1 Economics 8843/01 Answer all questions Question 1: Impact of Russia-Ukraine War on Various Industries Table 1: Prices of Meat, Cereal and Dairy between 2016 to 2022 FAO Meat Price Index FAO Cereal Price Index FAO Dairy Price Index 2016 91.0 88.3 92.6 2017 97.7 91.0 108 2018 94.9 100.8 107.3 2019 100.0 101.6 102.8 2020 95.5 103.1 104.8 2021 107.9 131.2 139.6 2022 118.8 154.7 159.5 Source: Adapted from the Food and Agriculture Organisation of the United Nations (FAO) Extract 1: World food prices hit new record on impact from Ukraine war Global food prices have struck a new high, soaring at the fastest monthly rate in 14 years after the war in Ukraine hit the supply of grains and vegetable oils, in a shift likely to do the greatest harm in poorer countries around the world. March’s food price index from the Food and Agriculture Organisation of the United Nations (FAO) rose to its third record high in a row, jumping 34 per cent from the same time last year . The index was 12.6 per cent higher than in February, a rise that the organisation described as a “giant leap”. According to estimates from the FAO and the Ukrainian government, 20 to 30 per cent of land in Ukraine producing winter grains, corn and sunflower will remain unplanted this spring or will be unharvested in July and August. Russia and Ukraine are important exporters of grains and sunflower oil, accounting for about 30 per cent of global wheat trade. Russia has continued shipping wheat since it invaded its neighbour in February, but western sanctions have complicated payments and transportations, leading to supply uncertainties. Food price inflation had already taken root before the Ukraine war started, after poor harvests around the world last year on the back of bad weather and a sharp rebound in post -pandemic lockdown demand. If the shortage of food commodities persists, the global number of undernourished people could increase by 8 million to 13 million, with the most pronounced increases occurring in Asia-Pacific, followed by sub-Saharan Africa, and the near east and north Africa, said the FAO. Source: Financial Times, 8 Apr 2022 Extract 2: Effects of war on the fertiliser industry The effects of the Russia -Ukraine war may reverberate through the global fertiliser industry for years to come. Post -COVID supply -chain disruptions had already pushed fertiliser prices to cyclical highs in 2021. Russia's invasion of Ukraine in February, an d the sanctions and trade

3 JC2 H1 Economics 8843/01 supply disruptions that followed then pushed prices even higher, grain prices also increased, reaching a peak in May 2022 . Russia is a major producer of the three main types of fertilisers - nitrogen, phosphate, and potash (NPK), and a major exporter of key raw materials for fertiliser production elsewhere in the world. High fertiliser prices have boosted earnings and profitability of the 12 global fertiliser companies rated by S&P Global Ratings. This is boosting fertiliser companies' profits and credit quality for now but has also destroyed demand from farmers unable to afford fertilisers and, in turn, increased food insecurity worldwide. It also highlights the need to reduce dependence on Russia, the world's largest fertiliser exporter. Yet, investment re quired to end dependence on Russian and Belarussian fertilisers is being hampered by high inflation, supply shortages, and in the case of nitrogen fertilisers, uncertainties over the shape of further regulation to decarbonize the industry. Source: Adapted from USDA, Economic Research Service Department of Agriculture, 2022 and World Bank, 2022 Extract 3: Pollution generated from the use of chemical fertilisers Farmers apply chemical fertilisers on their fields, which provide crops with the nitrogen and phosphorus necessary to grow and produce the food we eat. However, when nitrogen and phosphorus are not fully utilised by the growing plants, they can be lost from the farm fields and negatively impact air and downstream water quality. This excess nitrogen and phosphorus can be washed from farm fields and into waterways during rain events and when snow melts and can also leach through the soil and into groundwater over time. High levels of nitrogen and phosphorus can cause eutrophication of water bodies. Eutrophication can lead to hypoxia (“dead zones”), causing fish kills and a decrease in aquatic life. Excess nutrients can cause harmful algal bloom in freshwater systems, which not only disrupt wildlife but can also produce toxins harmful to humans. Fertilized soils, as well as livestock operations, are also vulnerable to nutrient losses to the air. Nitrogen can be lost from farm fields in the form of gaseous, nitrogen -based compounds, like ammonia and nitrogen oxides. Ammonia can be harmful to aquati c life if large amounts are deposited from the atmosphere to surface waters. Nitrous oxide is a potent greenhouse gas. There are many ways that farmers can prevent nutrient losses from their operations, including, but not limited to adopting the Nutrient Management Techniques: Farmers can improve nutrient management practices by applying chemical fertilisers in the right a mount, at the right time of year, with the right method and with the right placement. This would reduce the negative impacts on others. Source: Environmental Protection Agency, 2022 Extract 4: Malaysia raises ceiling price for chicken; industry players say issues remain unsolved Malaysia has raised its price ceiling for standard chicken to RM9.40 (S$3.10) per kg, which will come into effect on Friday. The decision, Agriculture and Food Industries Minister Ronald Kiandee said, was taken by the Cabinet after taking into account a ca sh assistance scheme announced by Prime Minister Ismail Sabri Yaakob, where cash aid of RM500 will be given to eligible low- and

4 JC2 H1 Economics 8843/01 middle-income households. Some 8.6 million households are slated to receive up to RM2,600 in aid this year. The government has previously capped the price of standard chicken at RM8.90/kg. The cap was set to be lifted on July 1, but a public uproar saw the decision being scrapped. Attributing global food inflation to supply chain disruptions triggered by geopolitical conflict and climate change, Dr Kiandee said “the government is trying its best to set a mechanism to ensure the Malaysian family isn’t burdened by the challenges of the cost of living”. Businessman Ameer Ali Mydin, who operates a chain of hypermarts, said the government should focus on solving the chicken supply shortage instead of tinkering with pricing. “The situation will be unchanged with the new ceiling price so long as we continue t o have supply shortages,” he said, as quoted by news site Free Malaysia Today. Chicken consumption in Malaysia is the highest amongst the various types of meat. Malaysia’s chicken supply first