QP_2022_H2_Prelims_Paper_1

©ACJC2022 Preliminary Exam 9757/01 ANGLO-CHINESE JUNIOR COLLEGE 2022 JC2 PRELIMINARY EXAMINATIONS ECONOMICS 9757/01 Higher 2 Paper 1 23 August 2022 2 hours 15 minutes Additional materials: Writing papers and 2 cover sheets READ THESE INSTRUCTIONS FIRST Write your exam index number and name on all the answers you hand in. Write in dark blue or black ink 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 / tape in your answers. Answer all questions. Begin Question 2 on a fresh sheet of writing paper. At the end of the examination, arrange your answers in order. Fasten your answers for Question 1 and Question 2 separately using the cover sheets provided. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 6 printed pages (including this page). Please check that your question paper is complete.

2 ©ACJC2022 Preliminary Exam 9757/01 Answer all questions. Question 1: The Nitrogen Fertilizers Crisis Table 1: Employment and consumption data on fertilisers 2015 2016 2017 2018 2019 Number of workers employed in US fertilizers industry 19 133 19 580 20 058 20 837 22 179 Fertilizers consumed in US (in million tons) 22.46 23.14 23.44 21.68 22.40 Fertilizers consumed globally (in million tons) 213.27 215.13 217.42 213.77 215.37 Sources: IBISWorld and ourworldindata.org Extract 1: The US fertilizer production industry Fertilizers are critical input for crop production and represent a major variable cost for several US crops. Farmers represent the end users in the fertilizers’ supply chain, and the prices they pay for fertilizer s depend on several factors including local demand, product type, retailer mark-ups, and transportation costs. The US fertilizers sector has undergone substantial changes. Between the 1980s and mid - 2000s, the combination of lower fertilizer s demand and higher input costs for fertilizers production caused the fertilizers sector to contract from 59 to 22 production facilities. The assumption is that highly concentrated industries are synonymous with market power , which can be detrimental to the society. Whether that will happen in reality rely on many factors, one of which is the level of government regulation in the fertilizers market. Source: Choices and the Agricultural & Applied Economics Association, 2020 Extract 2: USDA announces plan to support US farmers The US Department of Agriculture (USDA) will support American farmers by increasing the fertilizers production so as to address its rising costs. It is offering a $250 million new grant to encourage greater production of fertilizers. Additionally, to address growing competition concerns in the agricultural supply chain, USDA will launch a public inquiry, seeking