VJC_H2_ECONS_P1

1 VICTORIA JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2018 HIGHER 2 H2 ECONOMICS 9757/01 Paper 1 2 hours 15 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name and class 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 diagram or graphs. Do not use staples, paper clips, highlighters, glue or correction fluid. DO NOT WRITE IN ANY BAR CODES. Answer all questions. Start each question on a FRESH piece of paper. At the end of the examination, fasten your work securely, by question, using the strings provided. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages [Turn over

2 Answer all questions. Question 1: Infant Formula Milk Figure 1 – Singapore Infant Formula Milk Prices (S$ per 900g tin) Source: Singapore Department of Statistics Figure 2 – Volume of China’s Infant Formula Milk Import Source: Dairy Association of China Extract 1: Fear of tainted infant formula milk in China Ten years after China’s infant formula milk tragedy, parents still won’t trust their babies with local formula. The national disaster took the lives of six infants and sickened more than 300,000 babies in China. The chemical compound called melamine, used in plastic and fertilizer production, had made its way into infant formula milk; shattering the confidence of people in Chinese-made infant formula milk; and in the entire local food supply. Parents in China have been paying double to buy infant formula milk from Singapore, and are willing to pay up to S$200 to have the product couriered to their home as they believe the products from Singapore are of higher quality. Adapted from Asiaone.com, Feb 2018

3 Extract 2: Rising prices of infant formula milk Infant formula milk prices in Singapore have more than doubled over the last decade to become among the highest in the world. Parent s remain loyal to their chosen brands of milk powder even as the average price of infant formula milk continues to rise. They are willing to spend on good-quality infant form ula milk because infant formula milk constitutes the sole source of nutrients for their young child if breast milk is not available. Moreover, infant formula milk is a short-te rm spending item. As a result, they are willing to incur high expenses in the short-term to buy good quality infant formula milk. Adapted from The Straits Times, 8 Feb 2018 Extract 3: Government steps in to regula te the infant formula milk market in Singapore According to the Competition Commission of Singapore (CCS) study, new entrants into the infant formula milk market will find it extremely difficult to convin