2025 NYJC Paper 2 - Mark Scheme

2025 NYJC JC2 H2 ECONOMICS PRELMINARY EXAMS PAPER 2 The Restaurant Association of Singapore (RAS) reports that many food and beverage (F&B) outlets are understaffed by 20% to 30% even after offering salary increases of 25% to 30%. This persistent problem is attributed to a combination of factors, including Singaporeans' reluctance to take on F&B jobs due to long hours and physical demands, and tightened border controls limiting the number of foreign workers. Source: RAS, 2025 (a) Explain why a shortage of F&B workers might still exist even with the rise in the salaries of F&B workers. [10] (b) Discuss possible measures Singapore government can adopt to overcome future shortages of F&B workers. [15] Suggested answer: (a) Explain why a shortage of F&B workers might still exist even with the rise in the salaries of F&B workers. [10] Question Analysis Command Explain why (process explanation) Content ● Demand, Supply, shortage ● PED, PES Context - F&B workers Synopsis: R1: Shortages might still exist due to inelastic demand and supply of F&B workers R2: Shortages might still exist due to increase in demand and/or fall in supply of F&B workers Introduction: Define shortages: Shortages arise when the quantity demanded for F&B workers exceed the quantity supplied of F&B workers. Approach to question: [can differ depending on the approach adopted by the students] The shortages might still exist due to inelastic demand and supply of F&B workers, and the increase in demand and/or fall in supply of F&B workers. Define key terms Approach to answer R1: Shortages might still exist due to inelastic demand and supply of F&B workers ● Define P(W)ED: Measures the responsiveness of quantity demanded for F&B workers with respect to a change in salary (wage) of F&B workers, ceteris paribus. ● Inelastic P(W)ED: PED for F&B workers is inelastic as the role of F&B workers is essential. They are the backbone of a thriving hospitality sector, playing a crucial role in both the operational and customer-facing aspects of food and beverage businesses. They ensure smooth service, maintain hygiene standards, and create positive customer experiences, which are vital for the industry's success and reputation. ● Due to the role of F&B workers being a necessity in hospitality services, the increase in wage of F&B workers will lead to a less than proportionate fall in [ACCURACY] Accurate definition of PED/PES.

quantity demanded for F&B workers, making demand for F&B workers price inelastic. ● Define P(W)ES: Measures the responsiveness of quantity supplied of F&B workers with respect to a change in wage of F&B workers, ceteris paribus. ● Inelastic P(W)ES: ● The supply of F&B workers is often considered price inelastic because it's difficult for businesses to quickly increase the number of workers in response to wage increases. ● Supply F&B workers is price inelastic as i