MI_H2_ECONS_P1

2014 Preliminary Examination II Pre-university 3 ECONOMICS 9732/01 Paper 1 17 September 2014 2 hours 15 minutes 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 or graphs. Do not use paper clips, highlighters, glue or correction fluid. Answer all the questions. Begin answer for Question 2 on a fresh sheet of writing paper. At the end of the examination, hand in your answers to the 2 questions separately. The number of marks is given in brackets [ ] at the end of each question or part question. This question paper consists of 8 printed pages. [Turn over

2    Answer all questions. Question 1 The World Beer Industry Table 1: Beer Consumption by Country (All Volumes in 000’s kiloliters) 2008 2009 2010 2011 2012 China 39,130 42,194 44,683 44,738 44,201 United States 25,004 24,483 24,138 23,861 24,186 Source: Kirin Holdings News Release, 2009 – 2012 Extract 1: The spirit level Awareness of the effects of alcohol is extremely low in China. For centuries people enjoyed booze at celebrations, but few drank regularly. As inco mes have shot up over the past 35 years, alcohol consumption has accelerated. Average annual consumpt ion rose from 2.5 litres of pure alcohol in 1978 to 6.7 litres in 2010. Nearly 70% of that is spirits. More than half the Chinese population do not drink. Those who do drink often do so to great excess. Male Chinese drinkers drink far more than Japanese ones, and almost as much as notoriously sozzled British, Australian or Irish boozers. Binge-drinking is prevalent and high-risk drinking has reached “epidemic proportions” in China, reckons Hao Wei of Central South University in Changsha, the capital of Hunan province. In China drinking with clients and colleagues is now seen as vital to career advancement; some job adverts even call for “good drinking capacity”. The state has taken some action in response. Drin k-driving cases fell by nearly 40% in the two years after May 2011, when the government st arted to clamp down and increase penalties. President Xi Jinping’s anti-corruption drive has quashed lavish banquets (although this has made high-end liquor much cheaper). But the government has done little to promote public education. Other countries have curbed drinking by increasing tax on booze. In 2006 China lowered its already paltry liquor tax. Its health services and professionals are poorly equipped to deal with alcohol-related problems, says Yilang Tang of Emory University in Atlanta, Georgia. There are no national guidelines on responsible drinking and the minimum drinking age is ambiguous. Rules relating to the sale, consumption and advertising of alcohol are weak or ill-enforced. As Central South University’s Mr Hao puts it: “Alcohol can be bough