2025 ASRJC Paper 2

1 © ASRJC Economics Department 9570/02/JC2 Prelim /2025 [Turn Over ECONOMICS 9570/02 Paper 2 27 August 2025 Additional Materials: Answer Booklet 2 hours 30 minutes 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 answer booklet ask the invigilator for a continuation booklet. Answer three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. Begin your answer to each question on a fresh page of the answer booklet. The number of marks is given in brackets [ ] at the end of each part question. This document consists of 3 printed pages and 1 blank page. ANDERSON SERANGOON JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION Higher 2

2 © ASRJC Economics Department 9570/02/JC2 Prelim /2025 [Turn Over Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 The price of a cup of coffee has surged, due to poor crop yields in drought-hit Vietnam, while coffee consumption in Southeast Asia continues to rise due to growing affluence. In Singapore, regular coffee drinkers have noticed rising prices at their usual chains, with international brands such as Starbucks and Bacha Coffee seeing larger price increases than local brands like Heavenly Wang, Ya Kun, and neighbourhood coffee shops. (a) Explain how elasticities of demand can assist in understanding each of the effects of poor crop yields and growing affluence on the prices of different brands of coffee drinks. [10] (b) Discuss the impact of a rise in the price of a cup of Starbucks coffee on their revenue and the revenue of retailers selling related goods. [15] 2 Adult training generates external benefits and its private benefits are also often under- estimated. However, recent data from the Ministry of Manpower showed that Singapore’s adult training participation rate fell to a nine-year low of 40.7% in 2024. (a) Explain how a rational adult employee would decide whether to participate in a training programme and how a rational training provider would determine the output level of training services provided. [10] (b) Discuss whether subsidising adult training programmes is the best policy measure to improve efficiency in the market for adult training. [15] 3 Singapore's public transport sector was historically dominated by two operators - SMRT and SBS Transit. To enhance competition and service quality, the government intervened and enabled new operators such as Tower Transit and Go-Ahead to enter the market. This has helped reduce market dominance while ensuring service standards. (a) Explain how