2011 Prelims Questions AJC/2011/3 Monopolistic competition is the more prevalent market structure than oligopoly in an increasingly globalized

world. Discuss [25] ACJC/2011/1 Half of the worlds population enjoys fuel subsidies. The cheapest petrol is in Venezuala at 5% per litre. That makes Chinas subsidized pump price of 79 cents seem expensive, but even this is a bargain compared with $1.04 in US and $2.35 in Germany where fuel taxes are imposed. Explain the economic case for these 2 different approaches and assess whether the pricing of fuel should be left to market forces. [25] ACJC/2011/2 According to the data from market research firm, Euromonitor International in 2010, Fairprice has 48.1% of the market share, measured by total sales. Dairy Firm (Giant, Shop and Save, Cold Storage) follows with 21.7% and Sheng Siong has 16.5%. a) Explain the type of market structure that supermarket chains are likely to operate in [10] b) Comment on whether price competition should be the primary business strategy for supermarket chain ACJC/2011/6 To what extent can globalization contribute towards maintaining price stability in Singapore? [25] CJC/2011/3 The Cabinet has decided to develop two IRs comprising museums, convention spaces, theme parks and casinos. The Singapore government continues to be involved in the development and operation of the IR, including the building up of infrastructure supporting the IR and controlling access to the casino. a) Explain why the government is involved with development and operation of the IR. b) Discuss the effectiveness of government policies undertaken to ensure efficient allocation of resources in the case of the IR. CJC/2011/5 Higher labor costs in China have prompted companies to move production to lower wage countries like Bangladesh, Vietnam and Indonesia. a) Show how changing factor endowments can affect a countrys trading patterns [10] b) Assess whether free trade brings about greater benefits to large economies like China & Vietnam than small economies like Singapore. IJC/2011/4 The US Senate voted on 16th June 2011 to defeat a proposed extension of unemployment benefits for workers who have been jobless for nearly 2 years. a) Explain the likely causes of unemployment in Singapore

2011 Prelims Questions b) Assess the extent to which the Singapore governments approach to solving unemployment may differ from the US IJC/2011/5 Discuss the extent to which the multiplier and the degree of openness are likely to affect the vulnerability of economies to the impact of the US recession. [25] JJC/2011/4 The debt crisis engulfing the US has caused policy makers to adopt loose monetary policy. Interest rates in the US fell to 0.25% which is lower than Singapores interest rate of 1.81%. Discuss the extent to which the US has more to gain than Singapore from a fall in interest rates. [25] JJC/2011/6 a) Explain the economic basis for embracing free trade in Singapore [10] b) In the light of the economic downturn, discuss the importance of Free Trade Agreements (FTAs) in influencing trade patterns between Singapore and the rest of the world. [15] MJC/2011/Q2 a) Explain whether it is always advantageous for a firm to grow in size [12] b) Discuss how you would decide if a firm is exerting its monopoly power [13]