2025 CJC H2 Econs answer key (P1+P2)

1 H2 Economics Preliminary Examination 2025

2 Catholic Junior College Economics Department Examiners’ Report for Preliminary Examination 2025 H2 Economics Case Study Question 1 (a) Using the information provided in Extract 1 and a diagram, explain how the shift in market conditions contributed to the trend in plant-based food sales revenue shown in Figure 1. [4] According to Figure 1, plant-based foods sales revenue is rising/ increasing and projected to continue to rise/ increase. [1] From Extract 1, “food-related consumer habits often come and go as fads, but plant-based alternatives are here to stay – and grow” indicates a change in taste and preferences in favour of plant-based foods. [1] OR From Extract 1, “population growth to 4.6 billion by 2030” can also be accepted as a demand factor. [1] Demand rises and the demand curve shifts to the right from D1 to D2, assuming ceteris paribus. A shortage would occur at the original price, triggering an upward pressure on price, hence price will increase from P1 to P2 and increase in quantity from Q1 to Q2. Since retail sales revenue = P x Q, increase in both price and output will lead to an increase in retail sales revenue from P1Q1 to P2Q2. [1] Most students can recognise and state that sales revenue increased. When explaining TR change, there is a need to first explain how P and Q changed, to substantiate the claim of the change in the TR value. While the question was already clear it required only ONE shift, some candidates identified several factors and explained simultaneous shifts of DDSS. Some students did not explicitly state the information from Extract 1. Note that when quoting from the evidence, students should also practice the good habit of including the non-price determinant that has been affected. Some students did not link to a non-price determinant of demand, taste and preferences or population. Price adjustment process was sometimes missing from the explanation. Good answers include the Price Adjustment Process (PAP) with clear outcomes on P and Q. Good answers also stated that TR=PxQ Most students can draw the correct diagram with all the parts labelled. Answers that focus on BOTH demand and supply changing will be marked based on demand only. Answers that focus only on “increase in supply” will be marked based on relevant points only. Candidates are reminded that when analysing the impact of demand shifts on TR or TE, there is no need to bring in PES. Some students use a different tool of analysis: MC=MR P1 Price Quantity of plant- based foods 0 Q1 D1 D2 S P2 Q2

3 (b) Extract 2 mentions ‘more startups have joined frontrunners in launching or developing their own animal-free alternatives.’ Explain how the cross elasticity of demand can be used to predict changes in the producer surplus of traditional meat producers due to more startups. [4] Extract 2 states