HCI_H2_ECON_ESSAYS_(QUES)19SEP

© Hwa Chong Institution 2011 9732 /02/S/JC2 Prelim 2011 HWA CHONG INSTITUTION JC2 Preliminary Examinations Higher 2 CANDIDATE NAME CT GROUP 10A/S CENTRE NUMBER INDEX NUMBER ECONOMICS Paper 2 Additional Materials: Answer Paper 9732/02 19 September 2011 2 hours 15 minutes INSTRUCTIONS TO CANDIDATES Write your name and CT class clearly in the spaces at the top of this page and on every page 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 and tape. Answer three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. At the end of the examination, fasten all your work securely together. You are to fasten the answer sheets to essay questions separately together with the cover pages provided. The number of marks is given in brackets [ ] at the end of each question or part question. You are advised to spend several minutes reading through the questions before you begin writing your answers. You are reminded of the need for good English and clear presentation in your answers. Start each question on a fresh sheet of writing paper. This document consists of 2 printed pages. [Turn over

© Hwa Chong Institution 2011 9732 /02/S/JC2 Prelim 2011 2 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 In recent years, many countries have seen a stronger surge in trade, foreign direct investment, technology transfer and labour mobility. Assess the impact of these recent developments on expenditure by consumers on luxury and non-luxury goods and services. [25] 2 With growing environmental awareness, large cosmetic companies advertise they have invested in research to ensure their products are environmentally friendly. The aim is to increase demand and profits. (a) Explain what might happen to the fixed and variable costs in the above companies and how any changes might affect their profit maximising prices and output. [10] (b) Discuss whether the profits of such companies will in crease, and whether in the real world they will set prices and output at profit maximising levels. [15] 3 Discuss the effectiveness of government intervention in resource allocation in the provision of merit goods and when market dominance exists.