TJC_H2_ECONS_P1_answers

TJC 2018 JC2 Prelims H2 Economics Suggested Answers 1 H2 CSQ1 Suggested Answers Question 1: Tiny Plastic, Big Problem? (a) (i) Explain whether the change in Europe’s share of global plastic production meant that Europe’s plastic production fell from 2006 to 2015. [2] • Even though Europe’s share of global plastic production fell [1], Europe produced more plastic in 2006 than in 2015 as the global production increased in the same period. [1] • Mathematically, the amount of plastic produced by Europe can be calculated using the data in Figure 1 and Figure 2: o 2006: 22% of 245 million metric tons = 53.9 million metric tons o 2015: 18% of 322 million metric tons = 57.96 million metric tons Marker’s Comments: • Many students recognised Europe’s share is determined by: o Absolute amount of plastic produced in Europe o Total global plastic production • Some students failed to recognise that the data presented in Figures 1 and 2 could be used to determine the absolute amount of plastic produced in Europe. o Some students presented all possible scenarios (i.e. it could have remained constant, it could have increased). o A few students erroneously presented a demand and supply analysis of the situation in Europe to determine the possible change in Europe’s production during this period. (a) (ii) Has the market for plastic production become more or less competitive from 2006 to 2015? Explain your answer. [2] • Using three-country/region concentration ratio: The market for plastic production has become more competitive [1m] as the top three countries/regions’ share of plastic production fell from 67% in 2006 to 65% in 2015. [1m] OR • Using four-country/region concentration ratio: The market for plastic production has become less competitive [1m] as the top four countries/regions’ share of plastic production increased from 81% in 2006 to 82% in 2015. [1m] Marker’s Comments: • Many students failed to recognise the concept of “concentration ratio” is relevant when determining the degree of competition in an oligopolistic market. o This question allowed for two different answers, depending on whether the three- or four-country/region concentration ratio is used. As such, it is important to indicate clearly which one is being used to determine the answer. Failing to do so would make the answer incomplete/inaccurate. • Some students inaccurately identified the market to be monopolistic because of the dominance of one country/region (NAFTA in 2006 and China in 2015). o These students failed to show clear understanding of the concept of monopoly, which requires one firm to dominate the market as the single large firm (i.e. have more than 50% market share).

TJC 2018 JC2 Prelims H2 Economics Suggested Answers 2 • A handful of students considered the change from 67% to 65% (for the three- country/region concentration ratio) or 81% to 82% (for the four-country/region concentration ratio) as negligible, an