SRJC_H2_ECONS_9757_P1_Answer_MS

1 © SRJC 9757/01/JC2PreliminaryExam/2017 [Turn over ECONOMICS 9757/01 Higher 2 PAPER 1 11 September 2017 2 hours 15 minutes Additional Materials: Answer Paper SERANGOON JUNIOR COLLEGE JC2 Preliminary Examination READ THESE INSTRUCTIONS FIRST Write your name and civics group on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. Start your answer to each case study question on a new sheet of writing paper. Fasten your answers to each question separately. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages and 1 blank page.

2 © SRJC 9757/01/JC2PreliminaryExam/2017 Answer all questions. Question 1 The automobile and energy industries Figure 1: The world price of lithium (US$) Source: Metalary, accessed Aug 2017 Extract 1: The electric car revolution is accelerating Electric cars will outsell fossil-fuel powered vehi cles within two decades as battery prices plunge, turning the global automobile industry upside down and signalling economic turmoil for oil-exporting countries. The Bloomberg New Energy Finance (BNEF) forecast says adoption of emissi on-free vehicles will happen more quickly than previously estimated because the cost of building cars is falling so fast. The seismic shift will see electric cars account for a third of the global automobile fleet by 2040 and displace about 8 million barrels a day of oil production - more than the 7 million barrels Saudi Arabia exports today. China, the US and Europe will drive demand for battery powered cars over the next 25 years, according to BNEF. These governments which have already been the most advanced in providing subsidies and installing charging points, will reap the benefits sooner than other emerging economies like India. "Electric cars are intrinsically cheaper than gas or oil fuelled cars because they're simpler and their maintenance is a lot easier,” said Francesco Starac, Chief Executive Officer of Enel SpA, in an interview in Rome. While traditional car suppliers may be hurt by electric vehicle growth, some commodities will get a lift. Demand for lithium will rise significantly when electric vehicles become mainstream as the commodity is a vital component for lithium-ion batteries. Extraction of lithium from brine requires a lengthy evaporation process that lasts between 8 months to three years. Source: Bloomberg, July 2017 $3,000 $4,000 $5,000 $6,000 $7,000 2008 2009 2010 2011 2012 2013 2014 2015

3 © SRJC 9757/01/JC2PreliminaryExam/2017