EcoHL P3 M06 TZ0

EcoHL P3 M06 TZ0 - IB DIPLOMA PROGRAMME PROGRAMME DU...

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Unformatted text preview: IB DIPLOMA PROGRAMME PROGRAMME DU DIPLÔME DU BI PROGRAMA DEL DIPLOMA DEL BI M06/3/ECONO/HP3/ENG/TZ0/XX ECONOMICS HIGHER LEVEL PAPER 3 Tuesday 9 May 2006 (morning) INSTRUCTIONS TO CANDIDATES ¡ Do not open this examination paper until instructed to do so. ¡ Answer three questions. ¡ Use fully labelled diagrams and real-world examples where appropriate. 2 hours 2206-5103 11 pages 22065103 M06/3/ECONO/HP3/ENG/TZ0/XX 2206-5103 – 2 – Answer three questions. Each question is worth [20 marks]. 1. Study the extract below and answer the questions that follow. Drug companies bring hope for HIV/AIDS sufferers ¡ “Industry puts the average cost of developing a new drug at around US$800 million. Were it not for a patent system that rewards companies for risking millions on research, anti-HIV/AIDS drugs would not exist”, said World Trade Organization’s (WTO) director general, Mike Moore. ¢ 95 % of individuals worldwide who are infected with the HIV/AIDS virus live in poor countries, with almost no access to life-prolonging treatment because of barriers such as the high cost of drugs. £ One possible solution to the high cost of drugs seems to be through differential pricing schemes that charge poor countries less than the rich. This form of legal price discrimination is already used for vaccines and contraceptives, with prices as low as 1 % of those in the USA. Major pharmaceutical companies have recently promised to cut prices to cost levels in Africa. The aim is to cut the price for HIV/AIDS therapy by as much as 95 %. ¤ The big multinational corporations (MNCs) do not, in theory, object to differential pricing for their pharmaceutical products. But they still want patent protection and guarantees to prevent the re-entry of low-priced drugs back to developed countries. ¥ Delay can spell disaster when dealing with HIV/AIDS. A recent forecast sees South Africa heading for an economic collapse within three generations, as the number of wage-earners is dramatically reduced and parents die before they can teach their children the basics of life. Thankfully, the chance of this problem happening was reduced last week, when the South African government announced a serious, well-funded and long-term plan for treating its sick citizens with HIV/AIDS drugs. If the plan is competently implemented, HIV positive parents should survive long enough to put their children through school, and South Africa should pull back from the brink of catastrophe. [Source: adapted from Lancet 7 April 2001, Issue 9262 and Time 2 February 2004 Vol 163 Issue 5, Science 17 March 2000, Vol 287, Issue 5460, Lancet, 7 April 2001, Vol 357, Issue 9262, The Economist 29 November 2003 p. 11, Time 2 February 2004, Vol 163 Issue 5 p. 44] (This question continues on the following page) M06/3/ECONO/HP3/ENG/TZ0/XX 2206-5103 – 3 – Turn over (Question 1 continued) (a) Defne the Following terms indicated in bold in the text: (i) price discrimination (paragraph ¡ ) (ii) multinational corporations...
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This note was uploaded on 02/12/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Whittier.

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EcoHL P3 M06 TZ0 - IB DIPLOMA PROGRAMME PROGRAMME DU...

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