AJC_H2_ECONS_P1

READ THESE INSTRUCTIONS FIRST Write your name, PDG and index number 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. Answer all questions. Begin your answer to each question on a fresh sheet of writing paper. At the end of the examination, fasten your answers to each question (Questions 1 and 2) separately. Fasten this cover page in front of your answers to Question 1. The number of marks is given in brackets [ ] at the end of each question or part question. Name _______________________ ( ) PDG ______/13 This document consists of 7 printed pages and 1 blank page. [Turn over] Case Study Question No. Marks 1 / 30 2 / 30 Sub-total / 60 ANDERSON JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2014 Higher 2 9732/01 ECONOMICS Paper 1 16 September 2014 2 hours 15 minutes Additional Materials: Answer paper

2 BLANK PAGE

3 Answer all questions. Question 1 Water Scarcity Figure 1: Global water consumption, year 2000 to 2050 by components *BRIICS: Brazil, Russia, India, Indonesia, China, South Africa RoW: Rest of World (excludes OECD and BRIICS) Source: The Environmental Outlook Baseline, accessed 25 August 2014 Figure 2: People living in areas of water scarcity, by level of scarcity, year 2005 to 2050 Source: OECD Environmental Outlook to 2050, accessed 25 August 2014 Year Year

4 Extract 1: Water scarcity and possible consequences Water scarcity is an increasing threat in many c ountries and regions, as water pollution and overuse reduce available sources, while populations grow and competition between different uses increases. Global water withdrawals from the environment doubled between 1960 and 2000. In particular, groundwater extraction has risen from 100 -150 km 3 to 950 -1000 km 3 per annum since the 1950s. Groundwater is water located beneath the earth’s surface. Extracted groundwater undergoes processing and becomes what is known as potable water, which is water that is safe en ough to be consumed by humans. Water use is projected to increase at a much higher pace in developing countries, where agriculture is by far the main user, resulting in a global share of agriculture water use of about 70%. Adapted from: OECD, Managing Water for All, 2009 Extract 2: Water is underpriced – the idea that we are not paying the true cost for water In the water business, there are frequent complaints that “water is too cheap”. That is, the consumer does not pay enough for water. In the developed world we have access to clean safe drinking water and sanitation. With respect to water, there is a case to be made to adjust water pricing. If the over-extraction of groundwater leads to an impact on fisheries, habitats or