2013 CJC H1 Econs P1 Prelim Question Paper with Answers

CATHOLIC JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATIONS In preparation for General Certificate of Education Advanced Level Higher 1 ECONOMICS 8819/01 Paper 1 28 Aug 2013 0800 - 1100 Additional Materials : Writing Paper 3 hours READ THESE INSTRUCTIONS FIRST Write your name, class and question number 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 highlighters, glue or correction fluid. Begin each question on a new sheet of paper. Section A Answer all questions. Section B Answer one question. At the end of the examination, hand in ALL questions separately. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages.

2 © Catholic Junior College 8819/01/ Preliminary Exams/2013 Section A Answer ALL questions in this section Question 1 Cars and Floods Extract 1: Greater Integration Good for Asean, S'pore: PM Lee Greater integration is the best way to meet growing competition and create new opportunities for Asean. As he pressed for greater Asean economic integration yesterday at the Asean leaders' meeting, Prime Minister Lee Hsien Loong emphasized how Singapore companies also stand to gain from it. "Closer Asean integration will boost Singapore's position as the regional business hub and create new opportunities in HQ services and supply chain management," he said. He also said opening up Asean's services sector will offer a bigger market to Singaporean service companies such as those selling accountancy and medica l services. According to him, getting the Masterplan on Asean Connectivity off the ground will mean potential projects for Singapore companies in the logistics, infrastructure development, information and technology businesses. Asean must work together to become stronger because global competition, especially from China and India, is tough. Mr Lee said that speeding up Asean economic integration is the best way to meet growing competition and create new opportunities for the grouping. Source: The Business Times, 4 April 2012 Extract 2: Thailand Floods Disrupt Supply Chains & Raise Inflationary Risks Moody’s1 slashed Thailand’s GDP growth to 2.8% for the year in light of the heavy floods affecting its seven industrial estates. Automobile manufacturers are at the forefront as they get hit by factory closures, supply chain shortages, labour absences, transport r oadblocks and other flood -related factors. Toyota which trades on the Singapore Exchange, reported that its plants in Thailand were shuttered mainly due to supply delays. The Thai floods have resulted in an output loss of 37,500 vehicles in the country itself since the shut down of its factories. To further compound matters, the production halt at its Thai facilities have had knock on effects on its other production facilities affecting delivery of cars to Singapore. Most recently, Toyota had released state ments saying that it has reduced production hours in view of the supply chain disruption in Japan, United States, Canada, South Africa, Indonesia, the Philippines and Vietnam. Back home in Singapore, several companies have announced the flood’s impact on their operations in Thailand. Most of the affected are manufacturers of electronics, metals, rubber and plastic products. Business disruption amongst the major industry players sent shockwaves to several companies within the global supply chains. Such is t he case for Western Digital (WD), the world’s largest hard disk drive (HDD) manufacturers. In the food and beverage industry, Thai Beverage reported flood impacts on their subsidiaries where most of its finished goods had been transferred to other warehous es in unaffected areas. Similarly, Fraser and Neave announced the cessation of its dairies product manufacturing facilities in Rojana under its wholly-owned subsidiary F&N Dairies (Thailand). Source: Perspective, 4 November 2011 Extract 3: Thailand to Restructure Excise Tax System on Cars Restructuring of the excise tax on automobiles is in the pipeline after the tax hike on cigarettes and liquors, in line with global trends aiming to limit emissions of carbon dioxide, says the Thai Finance Ministry. 1 Moody’s is a credit rating agency.

3 © Catholic Junior College 8819/01/ Preliminary Exams/2013 Benja, director-general of the Excise Department, said a new car tax aims to limit the emission of carbon dioxide, instead of promoting power efficiency. Under the proposed new tax structure, the lowest rates would be applied to passenger car s that discharge no more than 100 grammes of carbon dioxide per kilometre. The next -lowest rate would be applied to cars not exceeding 150g/km, and the next rate to those emitting no more than 200g/km. A punitive rate would be applied to those releasing more than 200g/km. Source: Asia News Network, 23 August 2012 Extract 4: BMW Costing $260,000 Means Cars Only for Rich in Singapore as Taxes Climb Francis Goh sits in a bronze BMW 335i convertible in a Singapore showroom, waggling the wheel and feeling the leather. He isn’t fazed by the S$340,000 ($260,000) price tag, five times what the same car costs in the U.S. Record economic growth in the city state is en abling buyers like Goh, to splash out on Bayerische Motoren Werke AG and Daimler AG autos even as a 24 -fold jump in the cost of a car permit inflates costs. Source: Bloomberg, 17 February 2011 Extract 5: Wary Neighbours Turn Into Partners in a Quickly Developing Southeast Asia As Myanmar opens up to the world after decades of isolation, Thai construction crews are clearing paths through the malarial jungles in preparation for creating a gateway towards broader regional integration. The opening of Myanmar; the construction of bridges, railways and roads on the Indochinese peninsula; and the rise of inexpensive air travel are bringing the region’s nations closer to the goal of standing up to the two giants of the neighbo urhood, India and China. In 2014, Laos and its neighbo ur Thailand, are set to inaugurate the fourth bridge built across the Mekong River. Western Cambodia gets its electricity from Thailand, because of the natural gas that is piped in from Myanmar. And Myanmar says it will start rebuilding its rail line to Thailand. The impetus for the Asean nations’ integration in many ways comes from the outside. Both Japan and China have been active in financing infrastructure projects in the region, partly because a better-connected Southeast Asia will make it easier to sell their products — and, in Japan’s case, to link a vast network of suppliers to Japanese -owned factories. Thailand is gaining easy access between Bangkok and the port of Dawei, Myanmar, on the Andaman Sea. Ultimately, the new road will provide a shorter trade route to Europe, the Middle East and Africa for products made on the Indochinese peninsula. Source: Adapted from New York Times, 5 July 2012 Table 1: Imports by Region/Country into Singapore (in million SGD) Region Country 2006 2007 2008 2009 2010 2011 2012 Total 378,924.10 395,979.70 450,892.60 356,299.20 423,221.80 459,655.10 474,554.2 Asia 267,850.20 277,003.90 311,896.80 236,904.10 290,501.70 317,518.20 328,159.10 China 43,194.30 48,013.40 47,594.60 37,585.30 45,844.30 47,747.70 48,950.20 Malaysia 49,480.8 51,808.80 53,814.40 41,336.30 49,489.60 49,166.90 50,501.40 Thailand 13,856.30 12,797.10 15,922.70 11,906.90 14,000.50 14,270.20 12,674.80

4 © Catholic Junior College 8819/01/ Preliminary Exams/2013 Table 2: Exports by Region/Country from Singapore (in million SGD) Region Country 2006 2007 2008 2009 2010 2011 2012 Total 431,599.20 450,627.70 47