IJC_H2_ECONS_9757_QP_P1

INNOVA JUNIOR COLLEGE JC 2 PRELIMINARY EXAMINATION in preparation for General Certificate of Education Advanced Level Higher 2 ECONOMICS Paper 1 Additional Materials: Writing Paper and Cover Page 9757/01 29 August 2018 2 hours 15 minutes 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 a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid/tape. Answer all questions. Please begin each question on a fresh sheet of paper. At the end of the examination, submit each case study question separately. Attach a cover page to each case study question and write the question number on the cover page. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. You are advised to spend several minutes reading through the data before you begin writing your answers. You are reminded of the need for good English and clear presentation in your answers.

2 ©IJC 9757/01/IJC/18 UK households in the lowest 20% (by income) Innova Junior College [Turn over This document consists of 7 printed pages and 1 blank page. Answer all questions Question 1 United Kingdom’s Food and Drinks Industry and Brexit Table 1: Estimates for elasticities of demand for various items in the UK Price elasticities of demand Income elasticities of demand Bread and cereal -0.14 0.17 Fruit and vegetable -0.22 0.28 Meat -0.28 0.35 Beverage and tobacco -0.35 0.43 Source: Economic Research Service, United States Department of Agriculture Source: https://www.gov.uk, accessed 10th August 2018 Extract 1: Trends in UK food and non-alcoholic drinks prices In the UK, food and non-alcoholic drinks have risen in price since 2007, with rises ranging from 17% to 41%. Successive spikes in the price of agricultural commodities since 2007 have led to higher retail food prices. They have not returned to the low price levels of pre-2007. Food price rises have a strong effect on food shopping for low income households. Source: https://www.gov.uk, accessed 10th August 2018 Extract 2: Food industry shaken by Brexit prospects Figure 1: Trend in share of spending going on food in low income and all UK households

3 ©IJC 9757/01/IJC/18 Business and consumer confidence in the food and drink industry, by far the largest manufacturing sector in the UK, is increasingly fragile since t he upheaval caused by the Br exit vote, with the UK voting to leave the European Un ion (EU). Despite climbing sales, three-quarters of Food and Drink Federation (FD