IJC_H2_ECON_CASE_STUDY_Q1

Innova JC@Champions Way Innova Junior College H2 Economics Prelim 2 Paper 1 Case Study Question 1 Suggested Answer Scheme (a) Compare the changes in world fish production (sum of aquaculture and capture fisheries) and consumption for food use between 1980 and 2010. [2] - Both world production and consumption of fish for food are increasing. - However, the level of consumption of fish for food use is consistently below that of production 1m for general trend (Similarity) and 1m for distinct trend (difference). (b) With reference to the data, how far do you agree that there is sufficient fish production to meet consumption for f ood use in the next two decades as shown in Figure 1? [4] Figure 1 shows that projected production of fish continues to rise and is still higher than consumption of fish for food use. Thesis (There is sufficient fish production to meet consumption of fish for food use in the next 2 decades.) Sharp rise in fisheries production due to technological improvements. It increases the ability to fish in less accessible areas, which increases the supply of fish. This is evident in some countries in the EU where there are highly productive waters that have the potential to sustain a long-term and stable supply of fish, which is not yet utilized fully. Anti-thesis Rise in demand for fish for consumption as food which is faster than the rise in production of fish. This could be due to rising world GDP per capita  change in global diet to increase in consumption of fish. In addition, there is currently problem of overfishing  stocks continue to deplete (finite resource in a given period of time). 2m each (c) Analyse the possible consequences on pattern of tr ade of major fish producer countries such as China as a result of overfishing. [6]  Pattern of international trade is based on the theory of comparative advantage (CA). Based on the t heory of CA, countries should specialize in the production of goods that they have comparative advantage in and export it for goods it does not have CA in producing.  The amount of factor endowm ents a country has affects the comparative advantage a country has.  Short run: Overfishing by countries in general could reflect increase in fish available in China for sales  increase in volume of fish export.  Long run - Overfishing has resulted in depletion of the most traded fish from the sea/lake. This shortage ( within a geographical location) drives

Innova JC@Champions Way up prices. This results in higher opportunity cost in the production of fish  lose comparative advantage in production of fish (d) “The governmental quota system, which is aimed at regulating the fishing industry to prevent over-fishing, only be nefits large fishing businesses, while subsistence fishermen cannot afford to purchase permits with high enough quotas to make a living.” Discuss. [8]  Explain that overfishing is a s ource of