2013_MJC_H2_Econs_P1 QP

9732/01/PRELIMS/JC2/MJC/2013 MERIDIAN JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2013 HIGHER 2 ___________________________________________________________________ H2 Economics 9732/01 Paper 1 Case Study Questions 16 September 2013 2 Hours 15 Minutes Additional Materials: Writing Paper ___________________________________________________________________ READ THESE INSTRUCTIONS FIRST Do not open this booklet until you are told to do so. Write your name, class and register number in the spaces at the top of the answer sheets. Write in dark blue or black pen. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. You are reminded of the need for good English and clear presentation in your answers. Section A : Case Study (2h 15 min) Answer all questions. Answer each compulsory case study question on a fresh sheet of paper. 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 of a question. [Turn Over] This document consists of 9 printed pages and 2 cover pages.

9732/01/PRELIMS/JC2/MJC/2013 2 Answer all questions. Question 1 The Next Food Crisis Table 1: Annual Food Price Index (100=2002-2004) Date Food Price Index Meat Price Index Dairy Price Index Cereals Price Index Oils Price Index Sugar Price Index 2004 103.7 104.9 113.1 99.1 103.5 93.8 2005 103.3 105.8 119.2 91.2 91.3 123.6 2006 108.2 101.2 109.3 103.9 96.0 179.0 2007 127.7 100.7 170.9 134.3 136.8 115.1 2008 147.6 113.2 162.2 175.6 167.8 134.2 2009 123.9 105.0 111.8 137.2 119.2 203.2 2010 139.4 114.6 150.8 137.4 146.1 227.3 2011 154.0 119.5 149.2 167.1 170.7 249.7 2012 141.6 117.0 126.1 161.3 150.6 204.3 Source: Food and Agriculture Organization Extract 1: Food Prices The United States Department of Agriculture (USDA) recent ly released a report that said global output in several key commodi ties would fall while demand across a number of sectors would rise. The simple and relatively uncontroversial concept of supply and demand would dictate that food pr ices would increase. Following this announcement, prices did indeed rise. Corn is up 94 percent, soybeans 51 percent, and wheat 80 percent. Current prices are so high that they exceeded a previous record set in 2008, and the United Nations' Food and Agricultur al Organization’s (FAO) Food Price Index is at an all-time high. Specifically, there are a number of causes for this dramatic leap. The USDA cited supply side problems, such as floods of Au stralia, poor weather in South America, and extremely dry weather in Russia last y ear. In addition, they expect ethanol producers to use more corn for production of biofuels. In a bigger pic