PJC_H1_ECON_P1

Candidate Name: __________________________ CT Group: _______ Index number: __________ ECONOMICS 8819/01 Higher 1 Paper 1 Monday 19 September 2011 3 hours 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. Section A Answer all questions. Section B Answer one question. At the end of the examination, fasten your answers for Questions 1, 2 and 3 or 4 separately. The number of marks is given in brackets [ ] at the end of each question or question part. This document consists of 10 printed pages and 2 blank pages. [Turn over PIONEER JUNIOR COLLEGE JC 2 Preliminary Examination 2011

PJC H1 Prelim 2011 2 Section A Answer all questions in this section. Question 1: A Sweet Deal Gone Sour Extract 1: Sugar Prices Head Towards the Sky The price of raw sugar has increased to its highest level since 1981, as supply concerns grow. Growing demand for sugar to be turned into ethanol, coupled with a sharp fall in production, have both prompted worries. Sugar production in India for 2008-09 fell 45% year-on-year and a "drastic fall" is expected for the coming Indian crop. India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops. There are concerns that the pending sugar crop, which will be ready around November, will be inadequate. As the world’s largest consumer and second-largest producer, India’s output swings, which move the country back and forth from the status of an exporter to an importer, are a key factor in prices. Sources: The Financial Times, 28 July 2009 & BBC News, 10 August 2009 Extract 2: Food Companies Ask US Government to Boost Sugar-Import Quotas A coalition of food companies including General Mills Inc., Kraft Foods Inc. and ConAgra Foods Inc. asked the U.S. government to increase sugar-import quotas after inventories fell to a 34-year low and prices surged. The Sugar Policy Alliance, which also includes Mars Inc., Krispy Kreme Doughnuts Inc. and Hershey Co., wants to import more from Brazil, the world’s largest producer of the sweetener. Sugar prices in New York have jumped to the highest in 28 years. “Without allowing additional imports to enter the market, consumers will pay higher prices and domestic food manufacturing jobs will be at risk,” the alliance said today in a statement. Sugar is the only major U.S. crop under import restrictions. The U.S. limits shipments to benefit the domestic industry. Imports are managed through programs that lim