2025 TJC P1 Prelim H2 Econs

TEMASEK JUNIOR COLLEGE 2025 JC2 PRELIMINARY EXAMINATION Higher 2 ECONOMICS 9570/01 Paper 1 26 August 2025 2 hours 30 min Additional Materials: two 12-page answer booklets READ THESE INSTRUCTIONS FIRST Answer booklets 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 all questions. Indicate the question number clearly in your answers. Start Question 1 and Question 2 on separate answer booklets. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages and 0 blank pages.

2 Question 1: The economics of tea Figure 1: The volume and value of Kenyan tea exports from 2020 – 2024 Source: Tea Board of Kenya, 2024 Figure 2: Kenyan tea price Source: International Monetary Fund, accessed May 2025 Extract 1: Kenyan tea to China Tea is Kenya’s top export crop, bringing in over $1 billion yearly. The country is also the world’s biggest exporter of black tea. Tea has deep roots in Chinese culture, used for centuries in ceremonies, daily life and medicine. So China might seem like a perfect destination for Kenyan tea. But there’s a twist: China is the birthplace of tea, the largest producer, and one of the top exporters globally. Why would it need to import tea at all? And yet, it does. And increasingly, it’s importing tea from Kenya. Between 2022 to 2024, there has been a more than fourfold increase in just two years and ranking China the 10th export destination of Kenyan tea. China’s interest in Kenyan tea is clearly growing, driven especially by health-conscious consumers seeking orthodox, or traditionally produced, tea. Source: Africacheck.org, 23 April 2025 518.92 558.92 450.33 522.91 594.5 120.04 136.59 138.09 180.47 181.69 0 20 40 60 80 100 120 140 160 180 200 0 100 200 300 400 500 600 700 2020 2021 2022 2023 2024 Value in Billion Kenya Shilllings Volumne in Million Kilograms Volume (Million in Kilograms) Value (Billion in Kenya Shillings)

3 © TJC 2025 [Turn Over Extract 2: What is the true price of a cup of tea? The true price of tea reflects the visible as well as the hidden costs of its production. The calculated true price of conventional green tea leaf is €1.05/kg green tea leaf. This is the sum of the farm gate price (€0.35/kg green leaf) and the external costs of cultivation (€0.70/kg green leaf). The latter is also called the true price gap. Cultivation