NJC_H1_ECONS_P1_QP

This document consists of 11 printed pages. NATIONAL JUNIOR COLLEGE Economics Department [Turn Over © NJC 2015 ECONOMICS 8819/01 Paper 1 14 September 2015 3 hour Additional Materials: Answer Paper, Cover Pages READ THESE INSTRUCTIONS FIRST Write your name and subject class on all the work you hand in. Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY OF THE MARGINS. Section A: Case Study Questions Answer ALL questions. You are advised to spend some time reading through the data before you begin writing your answers. Section B: Essay Questions Answer ONE question. Start each question on a new piece of paper. Fill in the necessary information on the cover pages. At the end of the examination, fasten all your work securely with the cover pages given. The number of marks is given in brackets [ ] at the end of each question or part question. NATIONAL JUNIOR COLLEGE SH2 Preliminary Examinations for General Certificate of Education Advanced Level Higher 1

2 © NJC 2015 8819/01/Sep/15 Section A Answer all questions. Question 1 Palm Oil Market in Indonesia Figure 1: Global price of palm oil Source: World Bank Extract 1: Palm oil prices set for a volatile 2013 Palm oil prices are set to start 2013 on a sour note as record high stocks and rising output in Southeast Asia overwhelm already weak demand, while regulatory uncertainty in top buyers India and China adds to the gloomy outlook. Analysts and traders at an industry meeting in Bali expect the world's biggest palm oil producers, Indonesia and Malaysia, to boost supplies next year, barring any weather disruptions. While lower prices will attract food demand, appetite could be curbed by possible regulations by China and India. India, the world's biggest buyer, may set higher taxes on edible oil imports to protect oilseed farmers, and China launches strict quality curbs for imports on 1st of January 2013. Indonesia is also considering increasing tax incentives to encourage palm oil companies to set up refineries as it develops its downstream sector to compete with Malaysia and draw in more export earnings. Source: Adapted from Reuters, 30 Nov 2012 Extract 2: South-East Asia Haze: What is slash-and-burn? Slash-and-burn is arguably the easiest and cheapest way to clear patches of land for plantation. Some farmers are clearing the forest to plant crops. But the big concern is that many of these fires may have been started to burn rainforests so big corporations can plant oil palm plantations. An extremely versatile commodity that's cheaper and more efficient to produce than other vegetable oils, palm oil is currently used in half of all consumer goods from biscuits, to shampoos, to cosmetics and biofuels. In 2003, an European Union directive went into e