2025 ASRJC Paper 1

1 © ASRJC Economics Department 9570 / JC2 Prelim / 2025 [Turn Over ECONOMICS 9570/01 Paper 1 20 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 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 and 4 blank pages. ANDERSON SERANGOON JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION Higher 2

2 © ASRJC Economics Department 9570 / JC2 Prelim / 2025 [Turn Over Answer all questions. Question 1: The travel industry: A dilemma for the government Table 1: Air fare and passenger airline revenue Year Average air fare ($) Passenger airline revenue as a percentage of operating revenue (%) 2018 359 74.0 2019 357 73.8 2020 261 63.7 2021 327 58.5 Source: Bureau of Transportation Statistics, US Department of Transportation, April 2025 Table 2: Estimated income elasticities of passenger demand Countries Short haul flights Very long-haul flights Developed 1.3 2.2 Developing 1.8 2.5 Source: Travel Ready.Org. accessed 4 August 2025 Extract 1: The world’s most disappointing tourist attractions: what travel guides don’t always tell you When people dream of travel, they often imagine magical moments, perfect -picture scenery, and unforgettable experiences. But sometimes, reality doesn’t match expectations. While certain destinations are promoted worldwide as must -see attractions, many trav elers leave feeling underwhelmed, disappointed, or even frustrated. Whether due to overcrowding, commercialisation, inflated prices, or lack of authenticity, some of the most famous tourist spots around the globe fail to live up to the hype. Times Square in New York City is a classic example. Featured in countless movies and ads, it’s marketed as the heart of the Big Apple. But for many, the experience is more overwhelming than inspiring. It’s often crowded to the point of discomfort, noisy, a nd filled with aggressive street performers and overpriced stores. Visitors expecting a glamorous cultural hub often find themselves dodging costumed mascots and struggling to enjoy the surroundings. Travel is as much about expectation management as it is about destination choice. The disappointment doesn’t always lie in the site itself, but in the gap between what’s promised and what’s delivered. Social media plays a large role in shaping unrealistic visions of travel, where every moment seems magical and every destination flawless. Source: https://vocal.media/wander, April 2025

3 © ASRJC Economics Department 9570 / JC2 Prelim / 2025 [Turn Over Extract 2: The world's biggest airport cost £23bn to build and has more runways than Heathrow A colossal new airport is set to open at the end of the decade, becoming the largest in the world. King Salman International Airport, opening in Riyadh, Saudi Arabia is undergoing major works as part of the country’s £1trillion Vision 2030 building project. When finished, the airport is planned to have six runways and serve an estimated 120 million passengers. The country hopes to increase the numbers using King Salman International Airport to 185 million by 2050. The site is planned to span 35 square miles, around a fifth of which has been put aside for retail outlets. The construction works are projected to create 150,000 jobs, in roles ranging from air traffic control operators to baristas at the retail section's eateries. Source: The Daily Express, UK, 23 November 2024 Extract 3: How technology is changing the role of travel agents The impact of technology on travel agencies is being felt in a number of ways. Services to clients are increasingly focused and travel is becoming more experiential -based than destination-driven. ● Technology is providing the data needed to help agency managers streamline their operations, reduce costs, and improve revenues. ● Customer service is becoming easier, faster, and more cost-effective. Social media is one technology tool that enables a small number of staff to handle large numbers of inquiries, forward automated alerts to update travelers on delays and wait times and share interesting industry information. ● Online data gathering is pervasive and a bit creepy, yet it also is useful in that it enables the travel agent to more effectively customize travel to the client’s interests, comfort, and well-being. Among the more important technologies, a travel agent must employ are mobile technology, social media, and the human touch. Social media is one of the more significant tools major businesses are employing to build brand awareness and customer relationships. Finally, the human touch. No technology on earth replaces the importance of the human touch. Computers and analytics can spout all manner of trending data but it takes the travel manager or agent to put that data to use to personalize each client’s travel. Technology doesn’t build relationships – humans do. Source: Travel Technology and Solutions, 4 August 2023 Extract 4: Negative impacts of tourism in Bali For some countries, the decision to impose restrictions on tourism may not be an easy one. Bali has been experiencing significant economic growth thanks to the surge in tourism. The influx of visitors has brought in tremendous revenue to the local economy, allowing the region to invest heavily in various infrastructure projects. The island now boasts modern facilities, high-end accommodations, and top-notch dining options, attracting even more tourists to this vibrant location. With the expansion of new att ractions, Bali’s economy shows no signs of slowing down, and the local market continues to thrive. There is no denying that tourism has

4 © ASRJC Economics Department 9570 / JC2 Prelim / 2025 [Turn Over become a crucial driver of economic growth in Bali, bringing with it endless opportunities for progress and development. Tourism has undoubtedly provided financial benefits to Bali, but the extent of these gains is debatable. Unfortunately, much of the wealth generated is not finding its way into the hands of local businesses and individuals, which is concerning. Instead, mu ltinational companies appear to be reaping most of the rewards. This has created a negative impact on the local economy, as Bali is becoming increasingly reliant on outside businesses for revenue. As a result, the Balinese are struggling to keep their businesses afloat, which can have significant consequences for the island’s overall economic stability. Thus, while the tourism sector stimulates economic activity and creates jobs, the negative effects associated with overtourism often outweigh their economic benefits. Source: Victoria Heinz, Unsustainable Magazine, 10 July 2023 Extract 5: Countries around the world are battling overtourism. Could a hub like Singapore be next? Amid the slew of overtourism reports globally, Singapore, a hub in itself, would appear to stand far from the madding crowd. The millions of visitors descending on the small nation have not led to any major negative effects on the quality of life for citizens, which experts and authorities attribute to a focus on well -planned infrastructure as well as tourist spending over numbers. Still, is there a risk of this worldwide phenomenon catching up to Singapore – and how prepared is it to deal with such a possibility? Singapore's tourism strategy takes reference from a 2018 World Tourism Organisation report, which calls for tourism to be