MJC_H2_ECONS_9757_P2

9757/02/PRELIM/JC2/MJC/2018 MERIDIAN JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION 2018 ___________________________________________________________________ H2 Economics 9757/02 Paper 2 Essays 17 September 2018 2 hours 15 minutes Additional Materials: Writing Paper ___________________________________________________________________ READ THESE INSTRUCTIONS FIRST Do not open this booklet until you are told to do so. Write your name, class and register number in the spaces at the top of the answer sheets. 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. 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. Begin each essay question on a fresh sheet of paper. At the end of the examination, fasten all your work securely to the cover sheet with the string provided. The number of marks is given in brackets [ ] at the end of each question or part question. [Turn Over] This document consists of 3 printed pages and 3 cover sheets.

9757/02/PRELIM/JC2/MJC/2018 2 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 Due to scarcity, resources have to be allocated between competing uses. For instance, farmers in India are increasingly allocating more land to growing cotton instead of tea leaves. Such decisions ma y be influenced by fast-changing clothing trends. (a) Explain how the price mechanism can allocate scarce resources efficiently with increasing demand for a product. [10] (b) Given these farmers’ decision on the use of their land, assess the relevance of elasticity concepts in explaining the impact on consumers’ expenditure on tea and other beverages. [15] 2 Discuss the extent to which government failure is the main factor that a government should consider when addressi ng the various sources of market failure. [25] 3 Disruptive technologies include the advent of e-commerce retailing which has led to consumers buying cheaper products online rather than going to a physical location. (a) Explain how the survival of firms is affected by disruptive technologies. [10] (b) Discuss whether increasing competition faced by large retail firms is desirable for the society. [15]

9757/02/PRELIM/JC2/MJC/2018 3 Section B One or two of your three chosen questions must be from this section. 4 Discuss the extent to which trade-offs in macroeconomic objectives will arise when the Singapore government allows its currency to appreciate. [25] 5 Rising government expenditure especially on subsidies is causing many governments to face rising debts. (a) Explain the proc