TJC H1 ECON P1

1 TEMASEK JUNIOR COLLEGE Preliminary Examination 2011 General Certificate of Education Advanced Level Higher 1 ECONOMICS Paper 1 8819/01 14th September 2011 3 hours Additional Materials: Answer Paper, Cover Sheet READ THESE INSTRUCTIONS FIRST Do not turn over until you are told to do so. Write your name and CG number 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. Section A Answer all questions. Section B Answer one question. Begin each question on a separate sheet of answer paper. At the end of the examination, fasten your work for each question in Section A separately. Fasten your work for Section B and the Cover sheet together. Hand in your answer to each question separately. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages.   © TJC 2011     [Turn Over]

2 Section A Answer all questions in this section Question 1 Aviation and Tourism Table 1: Passengers travelling through Singapore Changi Airport from different regions (%) Year 2003 2004 2005 2006 2007 2008 2009 Asia 67.2 69.6 70.3 71.3 72.1 71.4 72.9 Oceania 15.4 14 13.7 13.2 12.8 13 12.4 Europe 13 11.5 11.0 10.6 10.1 11 10.3 Others 4.4 4.9 4.9 4.9 4.9 4.7 4.4 Source: The Straits Times, 25 Dec 2010 Table 2: Singapore Tourists Arrivals Year Jan to June 2009 Jan to June 2010 Total days visitors spent here 18.7 million 22.8 million Average hotel room rate $195 $230 Average hotel occupancy rate 72 % 87 % Source: Adapted from the Singapore Tourist Board Media Release Website, 31 July 2010 Extract 1: Three in four Changi Airport passengers are from the region Changi’s growing reliance on regional traffic did not happen just by chance, said Mr. Ng, an aviation analyst. It is a sign that the airport knows where the growth market is and has taken key steps ‘to go after the business’ by growing or wooing new airlines and encouraging those who already in the business to add capacity, he said. For the first time last year, the Asia-Pacific overtook North America as the business regional largest air travel market. Mr Ng said of the situation after the global financial meltdown: ‘post-crisis, we are also seeing faster recovery in this region than in other parts of the world, so the Asia-Pacific is going to continue to dominate growth in the air travel market’. The changing profile of Changi’s traffic could impact the overall earnings of Changi’s busi ness because regional travellers, and especially those who travel on new short-haul budget airlines, tend to spend less at airports. Low cost carriers

3 now account for about 25 per cent of total traffic at the airport. Changi airport Group spokesman Ivan Tan did said that over the years, sales hav e gone up by about 10 per cent a year. On average, spending per passenger has also gone up. This is a result of various initiatives, including GST absorptions in most retail outlets, dedicating more space for shops and other retail business. Source: Adapted from The Straits Times, 25 Dec 2010 Extract 2: Tourism hits record highs in Q1 The tourism sector posted strong growth across the board in the first quarter of this year, with visitor arrivals hitting record highs. The 3.12 million tourists, up 15.7 per cent from the same period last year, also spent 35.7 per cent more. The Singapore Tourism Board’s (STB) quarterly report, released yesterday, also showed that visitors spent 19 per cent more on food, 13 per cent more on shopping and 14 per cent more on accommodation. The hoteliers are upbeat about their earnings and may want to add capacity. Ngee Ann Polytechnic tourism lecturer Michael Chiam said travellers are more willing to splurge while they are overseas because of the bullish economy. ‘Of course, the two integrated resorts also helped to draw in the crowd in the next few years,’ he added. Source: Adapted from My Paper, SPH Publication, 27 Dec 2010 Extract 3: Aircraft and the environment Airports want to grow because more people want to fly. People would not refuse air travelling due to the time saving and convenience. Much of the recent growth is attributable to short-haul low cost airline travel. But cheap flying has come with costs attached. By most measures aviation generates about 5 % of man-made emissions of carbon-dioxide, the main greenhouse gas. But scientists argue that all planes and engine developments that cut carbon dioxide, nitrogen oxides and other emissions are set to continue. All aircraft fleet will be slowly updated to cleaner models. Governments and international bodies are intent on encouraging the industry to make greater efforts. A global cap and trade emissions trading scheme, drawn up under UN auspices, is set for consideration later this year. The European Commission plans to introduce trading in 2011 for all carriers based in the European Union. Later the scheme might, possibly, extend to all airlines operating there. The introduction of carbon-trading is a welcome step by governments that are not yet willing to consider a carbon tax Source: From the Economist, Aug 14 th 2007 Extract 4: A price on carbon if climate pact is inked Singapore will have to put a price on carbon to send the right message to consumers and firms if all countries pledge to curb greenhouse gas emissions, Prime Minister Lee Hsien Loong said yesterday at the annual Singapore Energy Lecture held at Suntec City. “If there is a global regime to curb carbon emissions… then we will have to make the right price signals,’ he said. [Turn over

4 The authority is studying the method that Singapore should adopt: a carbon tax or a cap on carbon emissions and trading of allowances. ‘Of the two, a carbon tax would be easier to implement in the short run. When consumers and businesses are more familiar with carbon prices, then a cap and trade system could be implemented,’ said Mr Khew, who is the chairman of the Sustainable Energy Association of Singapore. In a changing energy landscape, Singapore’s challenge will be to find energy that is cost-competitive, secure, clean and sustainable. To that end, Singapore has invested in beefing up knowledge and capabilities in different types of energy such as nuclear and solar to give the country more options in the future. With a Spring Singapore development grant one local biodegradable-plastics company Winrigo developed a carbon assessments technology to calculat e emissions. But not all companies will be willing to disclose their entire manufacturing process in order to properly calculate emissions. But knowing how much emission their processes produce can help companies cut their carbon footprint. For instance, food manufacturer Prima Group is revising its purchasing decisions to consider suppliers closer to its flour mills and cutting energy use and reducing waste at its mills. Countries like New Zealand have just establ ished a cap-and trade system and many European countries such as Germany and Switzerland have carbon taxes. Singapore