2025 VJC Paper 2

Victoria Junior College [Turn over VICTORIA JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2025 HIGHER 2 ECONOMICS 9570/02 Paper 2 26 August 2025 2 hour 30 minutes No Additional Materials are required. 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 paper, 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. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 3 printed pages and 1 blank page.

2 Victoria Junior College 9570/02/PE/25 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 In many parts of the world, essential goods and services such as rice and electricity are scarce due to limited natural resources and increasing demand. In deciding how best to address the problem of scarcity, economists typically assume that consumers and producers act in self-interest. (a) Explain how the pursuit of self -interest and price signals could help to address the question of how much essential goods and services to produce. [10] (b) Discuss possible policy measures that a government can use to ensure a fairer distribution of essential goods and services. [15] 2 In Singapore, firms like GlaxoSmithKline and Roche hold significant market power in specialised drugs such as cancer treatments due to patent protection. This enables them to set high prices. Patients' lack of awareness of cheaper or equally effective alte rnatives can also result in overreliance on costly medications, resulting in inefficient resource allocation. (a) Explain how price setting ability and information failure in the pharmaceutical industry can lead to an inefficient allocation of resources. [10] (b) Discuss how government policies could be used to improve economic efficiency in the pharmaceutical industry and consider how likely it is that such interventions will be successful in achieving this aim.