2024 DHS Prelims H1 Econs (Q) (A)

© DHS 2024 8843/01/2024 Name: Centre/Index Number: Class: DUNMAN HIGH SCHOOL Preliminary Examination Year 6 Economics (Higher 1) 8843/01 Paper 1 Case Study Questions 16 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 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 including this cover page. [Turn over

2 Question 1: Food (Supply) Chain Extract 1: A fertilizer shortage, worsened by war in Ukraine, is driving up global food prices and scarcity Russia and Ukraine are key agricultural players and major providers of basic agr icultural- commodities, including wheat, maize and sunflower oil. The two countries are also key players in the world fertilizer market -- Russia and Ukraine together export 28% of fertilizers made from nitrogen and phosphorous, as well as potassium. As 70% of Ukrainian exports were carried by sea, the massive blockade imposed by Russian forces on all ports in the Black and Azov Seas following the war between the two countries are the main cause of the export crisis. At the same time, c ountries, particularly those in the West, have imposed sanctions against Russia including restrictions on imports from Russia. Together, disruptions of shipments due to sanctions and war ha ve sent fertilizer and grain prices skyrocketing. “Agriculture is absolutely going to get hit. Farmers are going to get hurt because they’re going to pay a lot more (for fertilizer),” said Bart Melek, an economist . “They’re going to get lower yield simply because they’re economising, particularly in emerging markets.” Grain shortages will drive up the cost of basic foods and other commodities. “That’s going to lead to higher input costs for producing everything from grains, wheat and corn. The input costs are higher now because you’re going to have scarcity that bids the price up as well,” Melek said. “We are absolutely facing a problem of catastrophic proportion here,” said CEO Tony Will, a fertilizer manufacturer. Farmers are likely to consider rotating in less fertilizer-intensive corps and will economise on the amount of nutrients they use. In turn, yields could be lower. “Consumers are going to make choices too,” he said. Sources: (1) CNBC, 6 April 2022, (2) European Parliamentary Research Service, June 2022

3 © DHS 2024 8843/01/2024 Figure 1: Price Indices of Grains and Fertilizer Source: USDA, Economic Research Service, 18 September, 2023 Extract 2: Urea use in agriculture and transport Exposure to exhaust from diesel engines can le