NYJC_H2_ECONS_P1

J2 H2 Economics (9757/01) 1 PAPER 1 Tuesday 12 September 2017 08:00 – 10:15 TIME : 2 hours 15 mins INSTRUCTIONS TO CANDIDATES Do not open this paper until you are told to do so. Write your name, class and name of economics tutor in the space provided on the writing paper. Do not use staples, paper clips, glue or correction fluid/tape. Answer all questions. The number of marks is given in the bra ckets at the end of each question. Write your answers on the writing papers provided. If you use more than one sheet of paper, fasten the sheets together. Submit the answers for both case study questions separately. You are advised to spend several minutes per questi on reading through the data and questions before you begin writing your answers. There are _8_ printed pages including this cover page PRELIMINARY EXAM 2017 Economics JC2 H2 (9757/02) NYJC

J2 H2 Economics (9757/01) 2 Answer al l questions. Question 1 Milk Market on the Milky Way Extract 1: Rising formula milk price Formula milk manufacturers have been spending more on research and development as well as marketing, pushing the wholesale prices of their products up, and in turn resulting in the higher prices seen at retail stores, the Competitio n Commission of Singapore (CCS) has found. A standard can of 900 grams of infant formul a purchased from a regular supermarket costs about S$56 on average, compared to $25 in 2007 The CCS report found that manufacturers spend heavily on research and development as well as marketing campaigns that contain “premiumisation ” messages in order to build consumer loyalty and make their products appear to be higher quality. Manufacturers introduce new ingredients that contribute to attributes desired b y parents and make promises like improving overall mental function, promoting a healthy intest inal tract and aiding brain and eye development. A premium image is important to these brands because they compete against other brands and their products based on brand name , nutrition and safety. Such strategies appear to have worked, with premium and specialty f ormula milk making up an estimated 95 per cent of total sales in 2015. Source: Adapted from Channel NewsAsia, accessed 12 May 2017 Table 1: Price of staples over 10 years Goods 2007 2017 Fresh Milk (1 litre pack) $2.63 $2.81 Infant Formula Milk Powder (900gram tin) $25.42 $56 .06 Cheese (pack of 12 slices) 3.89 $4.56 Hen eggs (10) 1.69 $2.17 Ordinary white bread (400gram) $1.21 $1.62 Thai Fragrant Rice (5 kg) $7.87 $13.13 Source: Singapore Department of Statistics, accessed 27 May 2017 Figure 1: Changes in median income and price of infant milk powder in Singapore Source: Various

J2 H2 Economics (9757/01) 3 Extract 2: Children over one do not need formula milk While