2013_SRJC_H1_Econs

© SRJC 8819/01/JC2 Prelim Exam/2013 [Turn over ECONOMICS 8819/01 Higher 1 PAPER 1 2013 3 hours Additional Materials: Writing paper SERANGOON JUNIOR COLLEGE JC 2 Preliminary Examination READ THESE INSTRUCTIONS FIRST Write down your name and civics group 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 any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Section A (2 hr 15 minutes) Answer all questions. Section B (45 minutes) Answer one question. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question.

2 © SRJC 8819/01/JC 2 Prelim Exam H1 Econs/2013/Answer Outline & Markers’ Comments Section A Answer all questions in this section. Question 1 Too hard to swallow Extract 1: World food prices jump to record high World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations (UN) said, exceeding leve ls reached in 2008 that sparked deadly riots from Haiti to Egypt. Sugar prices climbed for a third year in a row in 2010, and corn prices jumped the most in four years in Chicago. Food prices may rise more unless the world grain crop increases “significantly” in 2011, the Food and Agriculture Organisation said. At least 13 people died last year in Mozambique in protests against plans to lift bread prices. Last month’s year-on-year rise was higher than the 43 percent jump in food prices in June 2008. Record costs, crop problems, increasing demand, and the push for biofuel all contributed to the crisis that year. Global grain output will have to rise at least 2 percent this year to meet demand in 2011 and avoid further depletion of stocks, the UN agency has said. Source: www.bloomberg.com, 5 January 2011 Extract 2: Scrap biofuel support to curb food prices Governments should scrap policies to support biofuels because they are forcing up global food prices, according to a report by 10 international agencies including the World Bank and World Trade Organisation. The report adds to growing opposition to biof uels targets and subsidies such as those in Europe, Canada, India and the United States. "If oil prices are high and a crop's value in the energy market exceeds that in the food ma rket, crops will be diverted to the production of biofuels, which will increase the price of food," said the report. Biofuels have sparked a fierce "food versus fuel" debate since a spike in food prices from 2007 to 2008 that triggered riots in some developing countries. Biofuels have also come under increasing scrutiny for encouraging deforestation, a side-effect that c