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8819/01/Prelim/Yr6/11 © RI 2011 [Turn over RAFFLES INSTITUTION 2011 YEAR 6 PRELIMINARY EXAMINATION Higher 1 ECONOMICS 8819/01 Paper 1 1 September 2011 3 hours Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and CT 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 diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Section A Answer all questions. Section B Answer one question. Answer each question on a fresh sheet of paper. At the end of the examination, fasten all your work securely together with this sheet as cover page for your answer script. The number of marks is given in brackets [ ] at the end of each part question. Section Question Marks Name: __________________________ Civics Class: _____________________ A 1 /30 Economics Tutor: _________________ 2 /30 B (please fill in question no.) /25 This document consists of 8 printed pages and 2 blank pages. H

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8819/01/Prelim/Yr6/11 3 © RI 2011 [Turn over Section A Answer all questions in this section. Question 1 Rare Earths Extract 1 : China’s rare earth monopoly threatens global suppliers, rival producers claim The Chinese acquisition of stakes in Australian rare earth miners Lynas Corporation and Arafura Resources has caught the rest of the world sleeping. Following two acquisitions in the past six m onths for an aggregate US$163m, Korean, Japanese and Western players may find themselves locked out of the sector. With over 90% of the global rare earth resource held by Chinese companies, the country’s monopoly looks unchallenged. The recent Australian acquisitions have brought China’s control of the majority of the ra re earth deposits outside China. Rare earth metals are needed for the manufacturing of wind turbines, solar panels, plasma televisions, mobile phones and hybrid car batteries meaning the Chinese monopoly could shift the high-tech manufacturing industry bases from Japan and Korea to China. Although China is home to the largest rare earth reserves in the world, it is still actively seeking chances to acquire overseas mines. The purpose is to assure resources for the green energy and high-tech industries. Source: Mergermarket, 29 May 2009 Extract 2: China’s monopoly on rare earth metals could choke economies Global demand for rare earths has more than doubled over the past decade, as ever more devices make use of their unique properties. Rare earth phosphors in the television screen make the colours bright, while super -strong rare earth magnets allow electric motors to be compact enough to fit in a car, and headphones small enough to fit in your ear. Japan manufactures many of these goods and is the world’s biggest imp