SAJC H2 ECON P1 W SUGGESTED ANSWERS AND MARK SCHEME

ST ANDREW’S JUNIOR COLLEGE PRELIMINARY EXAMINATIONS – 2011 General Certificate of Education Advanced Level Higher 2 ECONOMICS 9732/01 Paper 1: Case Study Questions 14 Sep 2011 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 a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. 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. This document consists of 18 printed pages. [Turn Over © SAJC 2011 Suggested Answers and Mark Schemes

© SAJC 2011 9732/01/PRELIM Suggested Answers and Mark Schemes 2 Question 1 New Formula and Glittery Growth for Singapore Extract 1: Singapore Tourism Revenue Surges on Record Visitor Arrivals The money spent by tourists visiting Singapore su rged last year after a record number of people travelled to the city-state, attracted by two new casinos amid a rebound in the global economy. Spending rose 49 percent to S$18.8 billion ($14.7 billion) last year, exceeding the government’s forecast of as much as S$18.5 billion, the Singapore Tourism Board (STB) said in a statement today. International visitor arrivals rose 20 percent to 11.6 million in 2010. Efforts to boost tourism in 2010 included the inaugural Youth Olympic Games, while the Singapore leg of Formula One, the world’s most-watched motor sport, took place for the third year. Adapted from The Straits Times, 12 November 2010 Extract 2: Sentosa IR Edges Ahead of Rival Marina Bay Sands (MBS) Genting Singapore after being awarded its casino license, continues to lead the field in what is shaping up to be an intense horse race in Singapore's booming gaming market. Yesterday, it also unveiled details of new attractions set to make Universal Studios Singapore, housed within its Resort World Sentosa (RWS), a leading theme park in the region. Popular ride Battlestar Galactica, which has been suspended from operations since March, will re-open in the first half of next year. RWS said yesterday that it is well on track to meet its visitor targets for the first year of operations – 13 million – while giving more details about its upcoming enhancements. It said that its four hotels are fully operational, and that the show Voyage De La Vie opened in July to a good response. This quarter, RWS will launch the world's largest animatronic attraction, Crane Dance, at the waterfront. Universal Studios Singapore remained popular with local and overseas guests, although the main attraction Battlestar Galactica is still closed. RWS said that the ride and another new attraction, called Journey to Madagascar, will be opened in the first half of next year. MBS, which is owned by America’s Las Vegas Sands, markets itself as a business and convention centre. Its 57th-floor “skypod”, which seems to balance precariously atop three curving towers, is widely admired. Its infinity “skypool” is now the “go-to destination” for starlets who wish to splash around in bikinis for the cameras. It also has the world’s biggest ballroom and a perfectly vast shopping centre. Just a 10-mins ride away, RWS projects itself as a family resort: it boasts a large Universal Studios set, as well as the obligatory fun rides. Adapted from The Straits Times, 12 November 2010 Extract 3: Crown looks to attract more Middle East high rollers Casinos operator Crown Ltd says it is feeling the effect of competition from new casinos in Singapore but may be in a better position when extensive refurbishments of its Melbourne and Perth casinos are completed. "We expect to continue to feel the impact of Singapore, and it's a question as to how we can replace that business with new business out of China and also new business out of Singapore," Crown chief executive Rowen Craigie said.

© SAJC 2011 9732/01/PRELIM Suggested Answers and Mark Schemes 3 One thing Crown Ltd is looking at is attracting more gamblers from the Middle East to Melbourne's Crown casino and Burswood casino in Perth. Crown wants to improve links between the VIP gaming operations at the Aspinall's Club in London and its two Australian casinos, after completing its acquisition of Aspinall's in May 2011. "Aspinall's offers the group the opportunity probably to tap into the market that Aspinall's has traditionally serviced, which is the Middle East market," Mr Craigie said. "But we think in better integrating the two operations (Australia and the UK), we would be hopeful to get some new business out of the Middle East to Australia.” Adapted from www.heraldsun.com.au, 29 August 2011 Table 1: Quarterly Revenue earned by Marina Bay Sands (MBS) and Resort World Sentosa (RWS) in 2010 – 2011 (in million SGD) Integrated Resorts/Year 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Marina Bay Sands N.A. $281 $631 $728 $760 $958 Resort World Sentosa $460 $979 $744 $788 $922 $728 Note: N.A. = Not available; 1Q 2010 = 1st Quarter 2010 Source: Quarterly Financial Reports of MBS and RWS, www.straitstimes.com, June 2011 Extract 4: Government funding for Formula 1 (F1) Race The F1 race is set to generate $100 million for Singapore each year. But many question whether the returns are big enough for the government to fund 60% in organising the $150 million race. The spillover benefits to the economy are very large, whether it is tourism spending or consumer spending or business activity . "If STB is able to support this at a level comparable to the benefits for tourism and the economy, then it is justifiable. There are also mechanisms in place to ensure that if in fact the race is very successful, very profitable, then, profits beyond a certain pre-agreed level between STB and Singapore Grand Prix Pte Ltd will be ploughed back to defray the cost, in other words, to reduce the government grant," Minister of State for Trade and Industry, S Iswaran said. Adapted from Channel NewsAsia, 26 May 2007 Extract 5: F1 Tickets Sold Online Buck High Price Trend People fishing for a quick buck have cast their eyes on the latest happenings in town - the F1 race this weekend. More than 300 tickets have been spotted for sale on popular auction websites such as Ebay just days before the race is flagged off this Sunday. One listing is offering a three-day pit grandstand ticket for more than S$2,000. That's some S$600 above the official price of S$1,400. However, a large number of the tickets sold online are going for as much as 60 per cent below the official price. The practice is prohibited. Under the official purchase terms and conditions, tickets may not be resold or transferred for free or otherwise. Singapore Grand Prix Pte Ltd has served legal notice on at least one website for reselling F1 tickets and are in the midst of gathering more evidence against several more. Adapted from Channel NewsAsia, 25 September 2008

© SAJC 2011 9732/01/PRELIM Suggested Answers and Mark Schemes 4 Questions (a) (i) Describe the trend of the revenue earned by Resort World Sentosa (RWS) from 1Q 2010 to 2Q 2011. [2]