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H1 Economics Model Essays

At Economics Focus, our economics tuition places emphasis on honing our students’ case study skills, especially for H1 students. The case study questions (CSQs) contain unseen data that may comprise of a series of statistics that must be interpreted with the aid of economic tools. Also, several featured extracts are included in the CSQ to provide multiple perspectives relating to an overall theme set in the question. For instance, a CSQ may be based on the theme of ‘stagflation in the US’. As such, some students are confounded by the abstract terms that will undermine their confidence in handling the exam questions. Hence, it is imperative for students to develop case study skills to tackle a wide variety of CSQs, even if the topics covered seem foreign to them.

Another important aspect of preparation for CSQ paper is the need to understand the complexity of various question types of CSQs. Comprehending the types of questions will make it easier for students to derive the answering approaches. This will nurture their abilities to answer the questions spontaneously and accurately.

For the aspect of Microeconomics, students should examine the learning materials covered in the following chapters, namely Central Economic Problem, Price Elasticity of Demand and Supply, Income and Cross Elasticity of Demand and Supply, Cost of Production, Market Structures and Market Failures.

As for the aspect of Macroeconomics, it is important for students to learn and revise the following chapters, such as AS-AD Models and National Income Determination, Economic Growth, Inflation, Aims of Government and Macroeconomic Policies, Balance of Payment, International Trade, Foreign Exchange and Globalization.

Question 1
Market failure is often worsened by government failure. Discuss the extent to which this is true in your country. [25]

Introduction
In Singapore, the occurrence of market failures is seen in many industries and this calls for government intervention to ratify the industries so as to ensure that the industries attain efficient allocation of resources to maximize the net social benefit for the society. However, the intervention by the government may not be effective as there are limitations of government policies and circumstances for market failures. Therefore, it is imperative for countries

Main Body
1) Explain briefly how market failures will occur in Singapore.
– Identify the main forms of market failures in Singapore

2) Explain briefly how government intervention will take place in the various forms of intervention

3) Explain why government intervention will lead to government failures
– Reasons for government failures
(Time lag, cost of financing, asymmetric information, inefficient government, temporal solution, lack of expertise in the economy)

4) Examine why this situation of government failures will not occur in Singapore
a) Situation where the government failures will not occur
– Cost of financing – Singapore has huge reserves
– Inefficient government – statutory board and public service are quite efficient, low degree of corruption
– No lack of expertise as the government can engage foreign expertise to provide the goods and services

b) Situation where the government failure will occur
– Time lag – regulation and production process may be delayed due to unforeseen circumstance and complication of work – some MRT projects may not be done effectively and need more regulation
– Asymmetric information will always occur as the information about the population will change in very urbanized city with extensive social and economic activities like Singapore
– Temporal solutions – it is difficult for the government to set policy that will solve the problem permanently as demographics always change and social and economic activities are vibrant in Singapore

c) Analysis – what are the key determinants will affect this extent of government failures to occur

Conclusion
The understanding of the possibility of government failures is imperative as it will help economists and policy-makers in the country understand how we can be more effective in preventing the occurrence. In doing so, the intervention made by government to ratify market failures will be able to adjust industries to attain social efficient resource allocation so that the society will attain maximization of net social benefit gain.

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