JJC H1 J1 HBLE 2016

Welcome to JJC’s Economics Home-based Learning Exercise (HBLE)!

 PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

• This exercise is worth 20 marks and makes up 5% of your Economics grade for the year. Thus, you are required to take this exercise seriously.

• Complete both Section A and B

• You are expected to complete the assignment on writing paper.

• Please copy the questions on the writing paper as well.

• Submit your written work to your tutor’s pigeonhole by 21rd March 2016, 12pm

• Late submissions will result in the deduction of marks

Section A: Short Answer Questions

Watch the following video titled “Singapore Primary and Secondary Schools closed for haze” and the article and then answer the questions that follow.

Video: http://video.cnbc.com/gallery/?video=3000424972

Article: more-firms-on-board-for-haze-free-declaration

1. With the help of a diagram, use demand and supply analysis to explain how the action by Singapore Environmental Council to get supermarkets to withdraw Asia Pulp and Paper Group (APP) products off shelves and the campaign against such products would affect the equilibrium price and quantity of these APP products in Singapore.    [6]

2. Assuming that the palm oil prices in Indonesia has fallen, explain how this will affect            the resource allocation of the land owners between palm trees and food crops. [2]

Section B: Case Study

2015 marked the end of the Government’s Research, Innovation and Enterprise (RIE) 2015 plan, the latest of a series of five-year public investment plans in research and innovation.

Starting with the National Technology Plan 1995, the Government has steadily increased funding to help drive the R&D sector. Under RIE2015, a total of S$16.1 billion was allocated to establish Singapore as a global research and development (R&D) hub.

The RIE2015 tranche saw the growth of research partnerships between public and private sector organisations, resulting in industry collaborations such as the LUX Photonics Consortium and the Singapore Gastric Cancer Consortium.

The tranche also saw Singapore become a friendlier place for more entrepreneurship, with Singapore ranking first in Asia, according to the Global Start-up Ecosystem Report 2015.

Aside from RIE 2015, the Singapore government also introduced the Skills Future Credit Scheme that will start in 2016. Under this scheme, Singaporeans aged 25 and above will get S$500 which they can use to pay for about 10,000 courses across all key industries. The Government will also make subsequent top-ups periodically.

The 10,000 courses include those subsidised or approved by the Singapore Workforce Development Agency (WDA), as well as selected courses offered by tertiary institutions here. These include Institutes of Technical Education, polytechnics, autonomous universities, SIM University, LASALLE College of the Arts and Nanyang Academy of Fine Arts. These courses will help to increase the productivity of the workforce and instill lifelong learning value to the population.

Sources: Adapted from Channel News Asia, 6 Jan 2016 and 7 Nov 2016

1. Explain the opportunity cost of implementing the Skills Future Credit Scheme to the Singapore government. [2]
2. With the aid of a diagram, explain how Singapore’s Production Possibility Curve (PPC) will be affected by

i) RIE 2015 Plan

ii) Skills Future Credit Scheme     [5]

3. Imagine that you are a profit-driven entrepreneur and you are deciding if you should enter the market to provide upgrading courses/ WSQ (Workforce Skills Qualification) courses in Singapore. Explain some revenue and cost considerations before you decide to enter the market.  [5]

 

Please complete the survey: https://goo.gl/FaJp6t

-End of HBLE-

JJC J1 H2 HBLE 2016

Welcome to JJC’s Economics Home-based Learning Exercise (HBLE)!

 PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

• This exercise is worth 30 marks and makes up 5% of your Economics grade for the year. Thus, you are required to take this exercise seriously.

• Complete both Section A and B

• You are expected to complete the assignment on writing paper.

• Please copy the questions on the writing paper as well.

• Submit your written work to your tutor’s pigeonhole by 21rd March 2016, 12pm

• Late submissions will result in the deduction of marks

Section A: Short Answer Questions

Watch the following video titled ‘“Singapore Primary and Secondary Schools closed for haze” and the articles and then answer the questions that follow.

Video: http://video.cnbc.com/gallery/?video=3000424972

Article: more-firms-on-board-for-haze-free-declaration

1. With the help of a diagram, use demand and supply analysis to explain how the action by Singapore Environmental Council to get supermarkets to withdraw Asia Pulp and Paper Group (APP) products off shelves and the campaign against such products would affect the equilibrium price and quantity of these APP products in Singapore.    [6]
2. In formulating the decision to close schools due to the haze condition, what are some perspectives on different stakeholders that the Singapore government needs to consider?      [6]
3. In fighting against the haze situation in Singapore, what are some constraints faced by the Singapore government.   [5]

Section B: Case Study

Answer all questions

2015 marked the end of the Government’s Research, Innovation and Enterprise (RIE) 2015 plan, the latest of a series of five-year public investment plans in research and innovation.

Starting with the National Technology Plan 1995, the Government has steadily increased funding to help drive the R&D sector. Under RIE2015, a total of S$16.1 billion was allocated to establish Singapore as a global research and development (R&D) hub.

The RIE2015 tranche saw the growth of research partnerships between public and private sector organisations, resulting in industry collaborations such as the LUX Photonics Consortium and the Singapore Gastric Cancer Consortium.

The tranche also saw Singapore become a friendlier place for more entrepreneurship, with Singapore ranking first in Asia, according to the Global Start-up Ecosystem Report 2015.

Aside from RIE 2015, the Singapore government also introduced the Skills Future Credit Scheme that will start in 2016. Under this scheme, Singaporeans aged 25 and above will get S$500 which they can use to pay for about 10,000 courses across all key industries. The Government will also make subsequent top-ups periodically.

The 10,000 courses include those subsidised or approved by the Singapore Workforce Development Agency (WDA), as well as selected courses offered by tertiary institutions here. These include Institutes of Technical Education, polytechnics, autonomous universities, SIM University, LASALLE College of the Arts and Nanyang Academy of Fine Arts. These courses will help to increase the productivity of the workforce and instill lifelong learning value to the population.

Sources: Adapted from Channel News Asia, 6 Jan 2016 and 7 Nov 2015

1)Explain the opportunity cost of implementing the Skills Future Credit Scheme to the Singapore government.      [2]

2)With the aid of a diagram, explain how Singapore’s Production Possibility Curve (PPC) will be affected by:

i) RIE 2015 Plan

ii) Skills Future Credit Scheme                                                                                                  [5]

3) Imagine that you are a profit-driven entrepreneur and you are deciding if you should enter the market to provide upgrading courses/ WSQ (Workforce Skills Qualification) courses in Singapore. Explain some revenue and cost considerations before you decide to enter the market.   [6]

Please complete the survey: https://goo.gl/FaJp6t

-End of HBLE-

Videos and articles for H1 students (market failure)

In case you are having trouble finding the market failure videos, just follow this link.  It has all market failure related posts on this blog, including three videos (vaccines, motor vehicles in Singapore and emissions trading scheme)!

Here are a few direct links to the LTA webpage too:

• Park and Ride scheme
• VQS and COE 
• ERP

To round up the topic, also consider reading this.

Oil prices jump on fears over Ukraine Crisis

“Global oil prices soared to the highest levels this year on Monday as the Ukraine crisis raised concerns about disruptions to energy supplies.’

“The on-going uncertainty in Ukraine has caused further upside momentum to the oil market amid concerns about oil production issues,” said Myrto Sokou, senior research analyst at Sucden brokers in London.

Article source: http://www.channelnewsasia.com/news/business/international/oil-prices-jump-on-supply/1019488.html

• How exactly did the global oil prices rise?
• What contributed to it?
• For more details and further reading, please follow the above link.

Singapore’s Casino Entry

SINGAPORE – Marina Bay Sands, the world’s most expensive stand-alone casino resort at US$6.9 billion, held its grand opening a year ago in the teeth of a persistent global economic slump and in direct competition with the world’s second-most expensive casino resort, the US$5.7 billion Resorts World Sentosa.

Many analysts doubted either resort could turn a profit or failed suitors for Singapore’s two coveted gaming licenses eagerly awaited an opportunity to pick up these pricey properties at bankruptcy sale prices.

Genting Singapore — the owner of Resorts World Sentosa — on Monday posted a 77 per cent rise in first quarter net profit, boosted by a surge in gambling revenue and higher win percentage against high-rollers who patronised its casino.

Genting earned S$257.6 million in the three months ended March, up from S$145.4 million in the same period a year ago.

Resorts World recorded a 29 per cent jump in gaming revenue to S$671.9 million during the quarter, helped by a higher rolling volume and a better win percentage in the premium segment.

More than money
But seeing Marina Bay Sands just in terms of money misses much of the story. “There is no doubt that the two integrated resorts have added a new sense of vibrancy to Singapore,” University of Nevada-Las Vegas Singapore campus dean Andy Nazarechuk said. “In the past you would hear comments about Singapore being conservative or boring – you don’t hear those comments any more.”

Marina Bay Sands has become an architectural icon, with three hotel towers linked by the SkyPark 57 stories above Singapore’s financial district. The resort includes 2,560 hotel rooms, a permanent production of Disney’s The Lion King in one of its two theaters, the lotus-shaped ArtScience Museum, 121,000 square meters of convention space, a 74,300 square meter mall with 300 stores, and more than 50 food and beverage outlets, including cuisine by six celebrity chefs representing four continents.

Despite some teething problems, including a construction site ambience throughout its early months, Marina Bay Sands attracted 19.6 million visitors in its first year. “We are now top of the minds of many leisure and business travelers and have received overwhelming and positive responses,” a spokesperson for the resort said. “With the various attractions lined up and future plans to keep our visitors engaged, we are confident that we will not only sustain but broaden the type of tourists who visit Singapore.”

Marina Bay Sands targets business travelers and the “meetings, incentives, conventions and events” sector, while Resorts World Sentosa, featuring a Universal Studios theme park, aims at the leisure and family markets. “They appear to be perfectly complementary with regard to their products, facilities and experience offered,” said Robert Hecker, hospitality consultant Horwath HTL-Asia Pacific managing director. “They are mostly attracting and accommodating distinctly different demand segments.”

As anyone who has visited Singapore recently knows, the addition of nearly 3,000 rooms at Marina Bay Sands hasn’t torpedoed hotel rates. “There were initial concerns it might take a while to absorb the new rooms supply, but the scale of induced demand created extends beyond what the property itself can accommodate, so it’s been beneficial to the entire market,” Hecker said.

“The IRs have been a 9.5 out of 10,” former Marina Bay Sands chief executive Thomas Arasi said. “There’s a race going on around the region about tourism being part of the future economy. Singapore has just blown past everyone.” Even better days may be ahead as the integrated resorts come fully online. Resorts World Sentosa still has a record-setting aquarium, a museum and a water park in the works.

The gaming market, meanwhile, could get a further boost from the introduction of junket promoters to bring in VIP players. Dozens of promoters have applied for licenses under the stringent regulations of Singapore’s Casino Regulatory Authority, but none have won approval so far, even though gaming tax rates favor VIP play.

However, the government imposes a S$100 (US$80.50) daily entry tax (or S$2,000 annually) for residents to enter a casino, has banned casino shuttle buses in residential areas, and has issued fines for local promotions in its effort to discourage Singaporeans from gambling. Yet there’s still a public perception that too many Singaporeans are spending too much money at the casinos.

The Singapore government doesn’t release numbers on gaming revenue or gaming taxes, which encourages public perceptions that there’s something to hide. In comparison, Macau, Las Vegas and Atlantic City release extensive monthly and quarterly information on their gaming markets, while Australia and New Zealand don’t.

Adapted from:

http://www.atimes.com/atimes/Southeast_Asia/MF28Ae01.html

http://www.channelnewsasia.com/news/business/genting-singapore-q1/1095478.html

Questions:

1) What type of good is casinos in Singapore?

2) What are the positive externalities generated?

3) What are the negative externalities generated?

4) What are the policies that Singapore has in place to reduce negative externalities?

Merger no more

Publicis-Omnicom $35bn merger deal called off

Publicis and Omnicom, two of the world’s biggest advertising firms, have scrapped their planned merger.

The merger, announced last year, would have created the world’s biggest ad firm worth $35.1bn (£22.8bn).

The firms said they called off the deal as there were challenges that “remained to be overcome” and the slow pace of progress was creating uncertainty that would be “detrimental” to both of them.

They agreed to terminate the proposed deal with no break-up fee.

Last July, Omnicom’s chief executive John Wren was pictured signing the deal on the roof of the Paris headquarters of Publicis with its CEO Maurice Levy.

“The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders,” the two chief executives said in a joint statement released on Friday.

“We have thus jointly decided to proceed along our independent paths,” they said.

‘Remain competitors’

The advertising industry has seen big changes is recent years and is now having to adapt to the growth of social media platforms such as Facebook.

The proposed merger was expected to help the two firms respond to these changes.

The firms had said that the deal would help them make savings of around $500m (£325m) through pooling their resources, and also give them access to a wider range of clients.

Some analysts had also suggested that they might be able to negotiate better contracts, not least because the merger would have made them the biggest operator in the sector.

However, others had warned that the merger would create a conflict of interest between clients of the two companies – as they represented rival firms in many sectors.

The two companies said they would continue to “remain competitors, but maintain a great respect for one another.”

Questions:

1) What are the benefits of merger?

2) What do you think are the challenges stated in the article?

Venezuela’s Food Battle

The Guardian, Sept 2013

Toilet paper, rice and coffee have long been missing from stores, as Venezuelan president blames CIA plot for chronic shortages

Venezuelans queue for food at a state-run market in Caracas. Photograph: Reuters

It’s the rainy season in Venezuela and Pedro Rodríguez has had to battle upturned manhole lids, flooded avenues and infernal traffic jams in his quest for sugar, oil and milk in Caracas.

His daily battle to find food is not new, but it’s getting worse. “There is something about finally having enough to make ends meet and being unable to buy what I need because it’s gone missing. It leaves me feeling indignant,” says Rodríguez, a 55-year-old removal man who makes an average of £500 a month. “I haven’t lost hope that things will get better, but sometimes the end seems nowhere in sight.”

Venezuelans have faced shortages before, so rehashing old strategies such as substituting rice for manioc or going to informal street vendors who re-sell oil, milk or flour at a higher price, comes easy. For many here, finding food is not the problem – it is the lengths one has to go to that are hard to reconcile.

In Avenida Victoria, a low-income sector of Caracas, Zeneida Caballero complains about waiting in endless queues for a sack of low-quality rice. “It fills me with rage to have to spend the one free day I have wasting my time for a bag of rice,” she says. “I end up paying more at the re-sellers. In the end, all these price controls proved useless.”

In 2008, when there was another serious wave of food scarcity, most people blamed shop owners for hoarding food as a mechanism to exert pressure on the government’s price controls, a measure that former president Hugo Chávez adopted as part of his self-styled socialist revolution.

This time, however, food shortages have gone on for almost a year and certain items long gone from the shelves are hitting a particular nerve with Venezuelans. Toilet paper, rice, coffee, and cornflour, used to make arepas, Venezuela’s national dish, have become emblematic of more than just an economic crisis.

“We used to produce rice and we had excellent coffee; now we produce nothing. With the situation here people abandoned the fields,” says Jesús López, in reference to government-seized land that sits idle. “Empty shelves and no one to explain why a rich country has no food. It’s unacceptable,” adds the 90-year-old farmer from San Cristóbal, on the western state of Táchira, bordering Colombia.

For Asdrubal Oliveros, an economist at Ecoanalítica, one of the country’s leading consulting firms, this recent bout of food shortages is the result of a series of elements coming to a head. From an over-reliance on imports to price controls and, quite simply, a lack of funds, food shortages in Venezuela have not only peaked but they have lasted longer than ever.

“Other than oil, we produce close to nothing, and even oil production has decreased. There is a lack of hard currency, and, in a country that imports everything, this becomes more evident with food scarcity,” says Oliveros.

For Oliveros, an additional cause for the shortage of basic food staples is the decrease in agricultural production resulting from seized companies and land expropriations. “More than 3m hectares were expropriated during 2004-2010. That and overvalued exchange rate destroyed agriculture. It’s cheaper to import than it is to produce. That’s a perverse model that kills off any productivity,” he says.

Venezuela’s central bank, which has been publishing a scarcity index since 2009, puts this year’s figure at an average of 20%, which, according to economists in the country, is similar to countries undergoing civil strife or war-like conditions.

But despite the severe scarcity Venezuelans are not going hungry. The Food and Agriculture Organisation has said that the Latin American nation more than halved malnutrition indices to less than 5% since Chávez came to power. It gives partial credit to the government-run network of food distribution chains known as Mercal, which delivers subsidised food in shops across the country. And yet food has gone missing, and queues outside food shops often wrap around the block.

According to President Nicolás Maduro, the food shortages are being artificially induced by the opposition. He claims they form part of wider plan concocted by the CIA to destabilise his government, sabotage the oil industry and trigger power cuts.

In response, Maduro announced the creation of a state council that would inspect private companies to ensure they were not deliberately slowing distribution or decreasing production. The oil-rich country will also import almost £600m-worth of food from neighbouring Colombia to ensure stores are well-stocked.

Back in Catia, a low-income area in eastern Caracas, Rodríguez leaves the store almost empty-handed. He has found sugar but not a brand he recognises. He will buy oil from an informal seller for three times the regular price and forgo milk – again. “Part of me leaves the shop gleaming like I’ve hit the jackpot,” he says. “As if finding food was a matter of luck.”

Article from:

http://www.theguardian.com/global-development/poverty-matters/2013/sep/26/venezuela-food-shortages-rich-country-cia

Venezuela food shortages: ‘No one can explain why a rich country has no food’

Questions:

1)   Explain the type of price control used by the government

2)   Discuss whether price control is desirable to the society

3)   Suggest other appropriate policies needed to solve this food shortage.

Rising rice and wheat exports from India cause global wheat prices to fall

Image source: kewing @ flickr

“Exports of 2012/13 and likely exports this year mean 40 million tonnes of shipments. You look at whatever historical data you have, India has never ever done that,” said Gulati, chairman of the Commission on Agricultural Costs and Prices. ”

“Global wheat prices fell 25.6 per cent to $6.05 a bushel in 2013 due to oversupply, with benchmark Chicago futures still hovering around that level.”

Article source: India likely to export 18 million tonnes rice, wheat in 2013/14

How exactly did the price of wheat fall?  What contributed to it?  For details and further reading, please follow the above link.

Why are almonds so expensive?

Source: www.healthaliciousness.com

On BBC News, there is an article on the market for almonds — a trendy ‘superfood’ with supposed health benefits.

This is a product which has seen a huge growth in demand, prompted by research showing a reduction in cholestorol from eating almonds, benefits for patients with the onset of diabetes and a general appreciation their value as a food.

There’s been developments on the supply of almonds as well:

“Phippen’s solar-powered farm is a partnership between five families. It is one of the first in the world to use robots, designed using Nasa technology, to sort good almonds from bad.

It is a highly mechanised process with sophisticated irrigation systems in the orchards but, above all, almond production is dependent on the climate.

The region – which is about a 90-minute drive from Silicon Valley – is one of the few places in the world where almond trees will grow.

It has the perfect combination of a cold – but not too cold – winter, which allows the trees to lie dormant, followed by a mild spring that encourages them to wake up and bloom.

Crucially, the trees need about 500-700 hours of dormancy followed by a frost-free period when they burst into life – usually around Valentine’s Day.”

Read the article to identify more demand and supply factors!

Singapore Budget 2014 (in brief)

Budget 2014 in brief (pdf)

On 21 Feb 2014 (last Friday), Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered the Budget Speech for the Financial Year 2014 Budget.

For the complete speech, please click on the “Budget Speech 2014” link somewhere on the right.  Alternatively, you can watch the Budget Speech highlights here.