PJC_H2_ECON_P1

Pioneer Junior College 2011 9732/01/O/N/11 [Turn over Candidate Name: _____________________________ CT Group: ___________ Index number: __________ ECONOMICS 9732/01 Paper 1 Monday 19 September 2011 2 hours 15 minutes Additional materials: Writing Paper READ THESE INSTRUCTIONS FIRST Write your class, index number and name 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 your work for Question 1 and 2 separately. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages and 1 blank page PIONEER JUNIOR COLLEGE JC 2 Preliminary Examination 2011 Higher 2

Pioneer Junior College 2011 9732/01/O/N/11 2 Answer all questions Question 1 The Tea Boom: Steaming Ahead Extract 1: No Break for Britons as Tea Price Set to Soar Unilever, owner of PG Tips have announced price ri ses of up to 15 per cent on its loose tea and tea bags. Other big-name brands are expected to follow suit, with some analysts predicting rises of around £3 to £3.40 for a box of 160 tea bags. However the UK Tea Council, which represents both traders and producers, claims tea is currently underpriced and that a rise in prices is long overdue. Bill Goinan, executive chairman of the council, said the increase was reasonable and would ultimately benefit producers in some of the poorest regions of the world. He added: "For the last ten years tea prices have not risen one iota.” "In 1999 80 tea bags sold for £1.89 and in February of this year we had our first substantial price increase in ten years taking the price to £1.97." He said he did not believe increased prices would deter consumers from enjoying tea. "If you look at the price of tea it is extremely good value for money. It is two pence a bag for a wonderful, natural, healthy drink." Two years ago the international price of tea dropped to a 30-year low as demand was weak in the face of increased competition from coffee and other drinks. Manufacturer Unilever said rising costs were responsible for the increase in prices to the consumer. Source: Adapted from The Scotsman, 19 May 2009 Figure 1: Market Share in UK Tea Market Source: www.acnielsen.co.uk Extract 2: Tea Prices Brewing Up to Beat Record Tea prices are set to climb 10-15 per cent higher next year from current record highs because global inventories are depleted following cr