RI 2024 H2 Preliminary Examination - Paper 1

9570/01/Prelims/Y6/24 © RI 2024 [Turn over RAFFLES INSTITUTION 2024 YEAR 6 TERM 3 PRELIMINARY EXAMINATION Higher 2 ECONOMICS 9570/01 Paper 1 Case Study Questions 27 August 2024 2 hours 30 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and civics class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer al l questions. The number of marks is given in brackets [ ] at the end of each question or part question. Start eac h Case Study on a fresh sheet of paper. At the end of the examination, fasten your answers to Case Study 1 and Case Study 2 separately. Detach this cover page and secure it in front of answers to Case Study 1. Question Marks Name: __________________________ Civics Class: _____________________ 1 /30 Economics Tutor: ________________ 2 /30 This document consists of 7 printed pages and 2 blank pages.

2 9570/01/Prelims/Y6/24 © RI 2024 [Turn over BLANK PAGE

3 9570/01/Prelims/Y6/24 © RI 2024 [Turn over Question 1: Oral Health Situation in Indonesia and Brazil Extract 1: Developments in private dental care market The growing awareness regarding oral care and the soaring problem of tooth cavities and gum disease worldwide have led to the increasing inclination towards preventive dental care, this has stimulated people to seek more routine check-ups with dentists. However, the price of private dental care has risen sharply over the years. Dr Jayaseel SR Pillai said that general inflation has affected the cost of dental materials, equipment, and overheads such as rent or mortgage payments, in turn leading to the rise in dental care cost. This is not helped by the highly fragmented dental care industry which makes it difficult to benefit from large -scale operations, where dental service providers typically differentiate themselves based on factors such as quality of care, specialised services, location, patient experience, and pricing. Dental technology such as dental imaging has advanced significantly in recent years, leading to more sophisticated equipment and materials. While these advancements can improve the quality of care, they often come at a higher cost, which may be passed on t o patients. Moreover, specialised dental procedures that require additional training for dental staff often take a longer time. Sources: Adapted from various sources Table 1: GDP per capita Year 2013 2014 2015 2016 2017 Brazil GDP per capita (Constant 2015 USD) 9216.5 9183.5 8783.2 8426.8 8470.9 Indonesia GDP per capita (Constant 2015 USD) 3086.3 3203.5 3322.6 3453 3591.8 Source: Worldbank.org Table 2: Consumption of Sugar in Indonesia Year 2013 2014 2015 2016 2017 Sugar consumption per capita (Kg) 22.9 23.4 23.9 25.2 25.5 Source: Indiansugar Extract 2: Challenges for Oral Health in Indonesia Unlike Brazil, Indonesia is a sprawling archipelago made up of over 17,000 islands, with about 6,000 of them inhabited. This dispersed geography makes it difficult to ensure consistent delivery of oral healthcare services and educational campaigns across the entire country. Ratu Mirah Afifah, head of professional marketing personal care at Unilever Indonesia, says: “Only

4 9570/01/Prelims/Y6/24 © RI 2024 [Turn over 2.8% of the population have brushed their teeth correctly, doing so at least twice a day before bedtime and after breakfast.” The low awareness of the importance of good dental care habits has led to a high incidence of dental and oral problems, such as dental cavities. This low awareness coupled with the lack of access to dental care translates into unrealised revenue for dental service providers, as many individuals either delay seeking dental care or fail to visit altogether. The total number of dentists in Indonesia is 43,000, including general dentists and specialists. However, the number of specialists is less than 5,000, which is still very limited, and most of them are concentrated in urban areas. This is challenging given that the process of becoming a dentist involves extensive education and training. In rural and remote areas where there are fewer dental professionals, the scarcity of such providers can lead to higher operating costs. Rural dental service providers may have to invest more in attracting and retaining staff, including offering higher salaries or incentives to compensate for the lower availability of skilled dental professionals. In contrast, while dental service providers located in urban areas may face higher overhead costs like higher rent, the higher patient volumes help to lower per unit costs. Sources: Adapted from various sources Extract 3: Smiling Brazil – Approach to Oral Healthcare Good oral health has been associated with improved social interactions and relationships, leading to a more cohesive and supportive community, in addition to reduced absenteeism rates for a more productive workforce. Culturally, Brazilians place a high val ue on social acceptance. This value has been effectively leveraged in Brazil’s efforts to improve oral health. The success of the Smiling Brazil Programme has partly been attributed to this emphasis on social acceptance, with Brazilians now believing that a beautiful smile boosts social acceptance. Recognising significant differences in oral health standards between urban and rural areas, the Smiling Brazil Programme was launched in 2004, utilising a joint provision approach that integrates the efforts of the government and private corporations. For example, private corporations like Colgate- Palmolive and Unilever sponsor dental care kits especially for communities in underserved remote areas, ma king oral healthcare accessible to those who might otherwise go without. Continuous professional development programs, funded by both the public and private sectors, ensure that dental professionals are equipped with the latest knowledge and skills. Apart from joint provision, community healthcare workers engage in grassroots-level outreach, education to raise the awareness of good oral health practices, and oral healthcare service delivery, ensuring that even the most isolated communities receive care. Brazil's healthcare expenditure has traditionally been higher than that of many countries, such as Indonesia. In recent years, Brazil has spent approximately 9-10% of its GDP on healthcare. According to the World Bank, Brazil's per capita healthcare expenditure is around US$900, compared to US$100 for Indonesia. Sources: Adapted from various sources

5 9570/01/Prelims/Y6/24 © RI 2024 [Turn over Questions (a) With reference to Tables 1 and 2 and using a relevant elasticity of demand concept, explain the change in sugar consumption in Indonesia between 2013 and 2017. [2] (b) Using a demand and supply diagram, explain how growing awareness towards oral care has led to the sharp increase in the price of private dental care. [4] (c) Explain one opportunity cost that a dental service provider may incur when upgrading to a new dental imaging technology. [2] (d) Explain two possible conditions that may enable a dental service provider to practice price discrimination. [4] (e) With reference to the case material, discuss the factors that a new dental service provider needs to consider when deciding to enter the oral healthcare market in Indonesia. [8] (f) Discuss whether joint provision used in Brazil would be the most appropriate way to achieve allocative efficiency in the oral health market in Indonesia. [10] Tota