Hwa Chong Institution H1/H2 Economics 8819/9732

C1 Promotional Examinations 2011

Prepared by Chee Yuan Jun 1

Name: ( ) CT Group: Economics – Demand And Supply

The questions below are selected for your revision for Monday's Economics Promotional Examinations. You can either do a timed assignment (of 45 minutes) for each essay, or do essay outlines, or a combination of both. This is to get you explaining the following concepts and questions in economic terms for Monday's paper. For P-cube students, you would realise that the 2 Promos Questions from HCI are the same from the P-cube tutorial; not to worry, you can do them again, or try the other questions.

[N2008 Q1] Developments in modern technology, such as faster broadband internet connections, portable DVD players, iPods and MP3 players, have had major impacts on the demand for and supply of recorded music and associated products. Asses how the markets involved might be affected by these developments. [25] HCI 2009 Promos In 2007 the Singapore economy grew at 7.8%, goods and services tax went up from 5% to 7%, and there were active campaigns on healthy living. Assess the likely effects of the above changes on consumers’ expenditure on fast food. [25] HCI 2010 Promos In 2009, several luxury car makers offered lower prices for their existing range of models. In addition, they introduced smaller engine capacity cars at affordable prices and invested heavily on advertisements. As a result they did better in sales despite an on-going recession. Discuss the relevance of different elasticity concepts to luxury car makers aiming to increase profits. [25]

Hwa Chong Institution H1/H2 Economics 8819/9732

C1 Promotional Examinations 2011

Prepared by Chee Yuan Jun 2

[ACJC Prelim 2010 Q2]

According to the United Nations (UN) Food and Agricultural Organization (FAO), wheat has doubled in price; maize is nearly 50% and rice is 20% more expensive than a year ago. Record world prices for most staple foods have not only led to food price inflation in many countries but have had major impact on the market for fertilizers and meat products.

Adapted from The Guardian, 3 November 2007 a) Explain the likely reasons for the record rise in staple food prices in recent years.

[10] b) Assess how the markets for fertilizers and meat products might be affected by these price increases. [15] [AJC 2009 Prelim Q1]

“Certificate of Entitlement (COE) supply for the fiscal year starting April 2009 will be cut by 24 per cent. A smaller COE quota will mean that overall sales of cars will be affected across the board since the supply of new cars will be restricted by a smaller quota…On the other hand, SMRT has decided to reduce bus and train fares and to increase the number of train trips given the severe economic crisis."

Adapted from: The Straits Times, Feb 2009 a) Using a diagram, explain how the recession and fall in the supply of COEs

will affect the market for new cars. [10]

b) Discuss the relative significance of demand elasticity concepts in explaining the decisions made by the public transport operator SMRT. [15]