RJC Econs 2008 H2 Prelims P2 final

Raffles Junior College JC2 Preliminary Examinations 2008 ECONOMICS Higher 2 9732/02 Paper 2 Essays 8 September 2008 2 hours 15 minutes Additional Materials: Answer Booklet/Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and CT 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 diagrams, graphs or roug h working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. At the end of the examination, fasten all your work and the cover sheet securely together. Place the cover sheet on top. The number of marks is given in brackets [ ] at the end of each question or part question. You are reminded of the need for good English and clear presentation in your answers. COVER SHEET This document consists of 3 printed pages. JC2Prelims 9732_02 © RJC 2008 [Turn over R a f f l e s R a f f l e s R a f f l e s R a f f l e s J u n i o r J u n i o r J u n i o r J u n i o r C o l l e g e C o l l e g e C o l l e g e C o l l e g e Developing the Thinker, Leader & Pioneer Please indicate the questions that you have attempted. For Official Use Only Question No. Marks Initial Total Name : Index No : CT Class :

9732/02/S/08 2 © RJC 2008 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 According to The World Bank, 16 of the 20 most poll uted cities in the world are in China. A plan to lift Beijing’s shroud of po llution ahead of the Olympic Games includes stopping half of Beijing’s 3.3 milli on vehicles and shutting down chemical plants, power stations and foundries to cut emissions by 30%. Adapted from http://www.huggingtonpost.com/2008/07/29/beijing (a) Using appropriate examples, explain and illustrate the terms “externality” and “public goods”. [10] )(b) Assess whether the measures stated above is the bes t way to curb pollution in China. [15] 2 Singala Technologies (ST) is a leader for high defi nition television (HDTV) micro-chips, producing 65% of world output. ST deli vers both leading-edge and cost-efficient HDTV micro-chips and earns huge profits. Use economic analysis to explain the ability of ST to be a leading producer of micro-chips and consider the likely effect of highe r fuel prices and an impending US recession on its future profits. [25] 3 (a) Distinguish, with the aid of diagrams, how prices a re determined in a perfect and imperfect market. [10] )(b) The price of goods is often determined by the consu mer, firm and or the government. The retail pump price of petrol in Malaysia is S$1.45 but S$2 in Singapore. To what extent is it effective and desirable for a government to influence the retail price of a good like petrol? [15] [Turn over

9732/02/S/08 3 © RJC 2008 Section B One or two of your three chosen questions must be from this section. 4 The sources of growth can be internal or external, but countries like China will need to prepare for a future in which it relies mor e on the strength of growth at home rather than on the strength of growth in the rest of the world. Discuss this assertion. [25] 5 (a) Explain how the inflation rate might affect the exc hange rate of a country. [8] )(b) Assess whether managing exchange rates is the only policy that an economy might adopt to tackle ailing export competitiveness [17] 6 (a) “Both trade barriers and barriers to entry into an industry result in inefficiency.” Explain this statement. [12] )(b) Does free trade necessarily lead to an increase in the standard of living in a country? [13]