Economics · 2010 · November · Paper 3 · HL · Question paper

N10/3/ECONO/HP3/ENG/TZ0/XX ECONOMICS H Ig HEr lEvEl PAPEr 3 Thursday 11 November 2010 (morning) INSTRUCTIONS TO C a N d I da TES  d o not open this examination paper until instructed to do so.  a nswer three questions.  Use fully labelled diagrams and references to the text / data where appropriate. 2 hours 8810-5103 11 pages © International Baccalaureate Organization 2010 8 8 1 0 5 1 0 3 N10/3/ECONO/HP3/ENG/TZ0/XX 8810-5103 – 2 – 1. Study the extract below and answer the questions that follow. Thailand calls for a rice cartel  Poor harvests, rising demand from growing populations as well as hoarding due to the expectation of further price rises have all been blamed for soaring rice prices. The price of Thai rice rose above US$1000 per tonne for the first time last month, up from US$383 in January.  At this time, Thailand, the world’s biggest rice exporter, plans to talk to Laos, Burma, Cambodia and Vietnam about cooperating on prices. It wants to form a rice cartel similar to the oil cartel, Organization of the Petroleum Exporting Countries (OPEC). The rice cartel aims to ensure food stability and to address food shortages. A Laos government spokesman said his country would consider the idea, saying a cartel would give the group of countries bargaining power. “By forming an association, we can help prevent a future price war and exchange information about food security.”  The proposal has met with opposition from the Philippines, the world’s biggest importer of rice. It argues that the formation of an oligopoly may deprive a large number of people of their right to basic food. “Almost three billion people are rice eaters,” said a spokesperson. “It’s a bad idea. It’s against humanity.”  The Food and Agriculture Organization (FAO) also objects to the proposal arguing that, at a time when the global food market is experiencing continuous price increases, hoarding and panic buying, it may not be beneficial to the rice-exporting countries and their farmers in the long-term.  Even inside Thailand, the Rice Exporters Association says that a rice cartel is impractical. It says that, unlike oil, rice is renewable and sustainable, and it can