2021 SAJC J1 MSA (WA1) Question & Suggested Answer w Examiners' Comments

1 ST ANDREW’S JUNIOR COLLEGE MILESTONE ASSESSMENT 1 (2021) General Certificate of Education Advanced Level Higher 1 ECONOMICS 8823 5-9 April 2021 Duration: 45 minutes READ THESE INSTRUCTIONS FIRST Write your name and class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 3 printed pages and 1 blank page © SAJC 2021 [Turn Over]

2 Answer all questions Question 1: Food prices in Singapore Extract 1: Increase in prices of fish and vegetables at wet markets in Singapore A Vegetables Some vegetables are costing about twice as much as they did just weeks ago. Vendors said poor weather conditions in Malaysia caused a shortage in supplies as farms were flooded, resulting in poor crop output. Transport is an issue because roads are closed owing to severe flooding. Mr Alex Zhou, 35, who runs a vegetable stall in the wet market in Pasir Ris Drive 6, said: "The constant rain in Malaysia has made it hard to transport goods, and we've lost a lot of supply due to the poor weather”. The vice-secretary of the Singapore Fruits & Vegetables Importers & Exporters Association, Mr Jerry Tan, noted that prices usually tended to tick upwards towards the end of the year because of the monsoon season, but this year has been exceptional. He said: "We've never seen such a drastic increase in such a short time before. But suppliers are trying to get their stocks from Thailand and Vietnam, so prices should start to drop and will stabilise soon." He added that the supply for spinach has also been badly affected as it is easily perishable, and thus not easy to get from farther afield, like from Thailand. B Seafood Mr Goh Thiam Chwee, the Chairman of the Singapore Fish Merchants' General Association, said that the prices of popular items, such as Chinese silver pomfret and red snapper, jumped by about 20 per cent, and might possibly increase to 30 per cent as Chinese New Year approaches. Traditionally, fish is regarded as an auspicious food because it is a homonym for abundance. In particular, the Chinese silver pomfret, is in demand during the festive season as it is deemed to be the best -tasting pomfret breed and favoured for its auspicious name. Source: The Straits Times, 12 Jan 2021 Extract 2: Vertical farms on the rise in land scarce Singapore A slew of high tech farms such as &ever, Indoor Farm Factory Innovation and Genesis One Tech Farm will begin operation next year. They are part of eight companies that have accepted the Singapore Food Agency’s (SFA) 30X30 Express Grant to ramp up local food production . The grant will help these companies accelerate Singapore’s efforts to meet 30 per cent of its nutritional needs with locally produced food by 2030. It will also help to minimise disruptions to Singapore’s food security, due to events such as the Covid -19 pandemic. As part of the grant requirements, some recipients, who are growing vegetables, have to ensure at least 50 per cent of the crops grown are Asian greens like xiao bai cai or kangkong. Mr Alfred Tham, Indoor Farm Factory Innovation’s (IFFI) chief executive officer, said robotics will also help reduce operational costs at its 38,000 square foot facility at JTC Space @ Tuas when it is ready for operation in the second half of next year. Beyond that, Mr Tham said their machines will have the

3 ability to analyse the condition of the plants, such as when they will be ready for harvest. All this, he said, will not only help to reduce manpower needs, but also scale up production to meet SFA’s minimum requirement of 200 tonnes of produce annually. Mr Tham said IFFI will be using an indoor farming methodology of soil -based cultivation, which allows them to have greater flexibility in the variety of crops that they can grow. What this means is that the plants can be grown in separate containers, which enables them to customise the growing conditions as needed. Aside from taking up far less space compared to a traditional open air farm, vertical indoor farms are also not at the mercy of the weather, said the representatives from the three companies. Moreover, growing conditions such as temperature, humidity and lightning conditions can be replicated so that plants that do not normally thrive in the tropics can be grown indoors instead. Price-wise, the representatives said it will be competitive. The prices may not be cheaper than the vegetables imported from Malaysia, but Mr Tham said they will definitely be fresher and of higher quality. It also offers a better alternative compared to imports from further away. Source: todayonline.com, 17 Nov 2020 Questions (a) With the aid of a production possibility curve, explain the impact on Singapore’s economy of i. allocating more land to build high-tech vertical farms in vegetable production ii. using advanced technology e.g. robotics used by high-tech vertical farms in vegetable production [3] [3] (b) With reference to Extract 1 and using a demand -supply diagram, explain why there is an increase in the price of seafood during Chinese New Year. [5] (c) With the aid of a diagram, explain how Singapore Food Agency’s grants can address possible shortages in the market for vegetables. [3] (d) Explain whether the Singapore Food Agency’s decision to provide grants to help companies accelerate efforts to meet 30 per cent of Singapore’s nutritional needs with locally produced food by 2030 is a rational one. [6] [Total: 20 marks]

4 Suggested Answers (a) With the aid of a production possibility curve, explain the impact on Singapore’s economy of i. allocating more land to build high -tech vertical farms in vegetable production When more land is allocated to build high tech vertical farms, opportunity cost is incurred, Assuming the next best alternative of the land use is to build more hospitals, opportunity cost in terms of the greater access to hospital treatments is forgone. Shows a point on PPC showing more farm produce at the trade -off of healthcare units in the diagram. Award any next best alternative (students should avoid vegetables). 0 OR When more land is allocated to building of vertical farm, this will lead to an increase in vegetables/farm produce as more resources are utilised for the production of farm produce. This can be seen by the movement of a point from A to B as point B implies a higher output of vegetables/farm produce. 0 [3] A B Healthcare (units) Vegetables/farm produce (units) VB VA HA HB A B Healthcare (units) Vegetables/farm produce (units)

5 Markers’ Comments Skills • Many students gave generic axes for the PPC – capital goods and consumer goods.