TPJC_H1_ECONS_QP

1 2017 JC2 H1 Economics Preliminary Examination (8819) TAMPINES JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION ECONOMICS Additional Materials: Writing Paper 8819 Tuesday, 12 Sept 2017 3 hours READ THESE INSTRUCTIONS FIRST Write in dark blue or black pen. You may use a soft pencil for any diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Section A (Case Study) [70%] Answer ALL questions Section B (Essay) [30%] Answer ONE essay question Submit each question separately. The number of marks is given in brackets [ ] at the end of each question or part question.

2 2017 JC2 H1 Economics Preliminary Examination (8819) Section A Answer all questions in this section. Question 1 Uber in Singapore A Certificate of Entitlement (COE) represents a rig ht to vehicle ownership and use of the limited road space for 10 years. There are 5 catego ries of COE for bidding – Category A to Category E. Vehicles classed under Category A are up to 1,600cc and 130bhp. Figure 1: 2016 COE Prices for Category A (1,600cc and 130bhp) Source: Land Transport Authority Extract 1: Private-hire car companies join in the bid for COE Uber-owned Lion City Rental is looking to put 1,800 new cars on the road in anticipation of growing demand. Rival company Grab is also expected to do the same. In recent months, both have started sourcing for new vehicles, and are jostling with private car owners for fresh Certificates of Entitlement (COE). Now, with the Go vernment announcing "light touch" regulations governing third-party taxi apps, the pr oliferation of private-hire vehicles will accelerate. Most of the taxi companies are also starting up private-hire subsidiaries to compete with Uber, Grab and other small players like Smove and Tribecar. This will only intensify the competition for COEs. Most private-hire cars are sm aller vehicles, so the pressure will be greater on COE Category A bidders (cars up to 1,600cc and 130bhp). However, the COE quota is set to grow. The supply of COE is mainly determined by how many cars are de-registered (and either scrapped or re-e xported thereafter); when one car leaves the road for good, it creates room for a fresh COE so that a new one can take its place. The COE release for passenger cars is expected to rise sharply to about 95,000, compared to about 58,000 in 2015. Source: Todayonline , 16 January 2016 & The Straits Times , 16 April 2016 Extract 2: Regulations on private-hire cars Private-hire car (PHC) drivers from ride-sourcing s ervice operators such as Uber and Grab are now required to obtain a vocational licence und er amendments to the Road Traffic Act. PHC drivers are required to go through a medical examination, attend a 25 hours course and pass a test. This framework will ensure the drivers are equipped with sufficient knowledge and skills to provide the service safely. Together with the existing ru