2013_SAJC_H1_Econs_8819 (Suggested Answers and Mark Schemes)

ST ANDREW’S JUNIOR COLLEGE PRELIMINARY EXAMINATIONS – 2013 General Certificate of Education Advanced Level Higher 1 ECONOMICS 8819/01 Paper 1 29 August 2013 3 hours Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name and 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 any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Section A Answer all questions. Section B 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. This document consists of 30 printed pages. [Turn Over © SAJC 2013 Suggested Answers and Mark Schemes

© SAJC 2013 8819/01/PRELIM Suggested Answers and Mark Schemes 2 Section A Answer all questions in this section. Question 1 Chocolate and Soda – Love them, Hate them Extract 1: Higher Chocolate Prices May Follow Africa's Cocoa Shortfall Villagers in West Africa, which produces 70 percent of the world’s cocoa, are abandoning the crop because its price is volatile, farms are too small to be economical, yields haven’t risen for decades, and alternative crops such as rubber are more lucrative. “They produce half a ton per hectare of cocoa, and it has been that way forever. All major agricultural prod ucts have improved their yields by a factor of 5 to 10 in the last 50 years, and cocoa hasn’t,” says Barry Parkin, the head of global procurement and sustainability at Mars, whose products include M&M’s, the best -selling chocolate candy in the U.S. He reck ons that demand will outpace production by 1 million tons by the end of the decade. To deal with more frequent cocoa shortages, confectioners have been shrinking the size of chocolate bars, adding more air bubbles to chocolate, or simply substituting more vegetable oil for cocoa butter. They also can pull from global stockpiles, which stood at 1.8 million metric tons as of Sept. 30, according to the International Cocoa Organization. But experts say it will be tougher to cope beyond 2020 without improved production. Source: Bloomberg Business Week, 7 February, 2013 Extract 2: Tax chocolate to beat obesity, say doctors Chocoholics face a fight with doctors who want to slam heavy taxes on their favourite treat. Doctors say too much chocolate makes them fat and it should be priced up – like alcohol and tobacco – so they buy less. Nutritionist Dr David Walke