Title of Essay: Discuss, with economic reasons to support your arguments, whether the Singapore government currently adopts

the most appropriate economic policies in the provision of education. [25] Content: Why is education a special case? (i) Its a Merit Good and (ii) there are strong positive externalities, moreover (iii) there is an equity consideration. What policies does Singapore currently adopt? Compulsory primary education, subsidised for all, free for needy cases, bursaries, scholarships, etc. A mixture of public provision and private independent schools. Overseas scholarships available for those who will contribute to the public good PSC scholars = positive externalities. Knowledge, Application, Understanding, Analysis L3 Policies on education differ for different ages. Subsidy gets smaller at higher stages as more of the benefit accrues to the individual and less to society. Movement away from one-sizefits-all to customized, e.g. 3 different universities, La Salle, Sports School, Independent Schools, etc. Recognition that education needs to be customized. Possible drawbacks with govt provision of education X-inefficiency? Subsidies given to all, though some may not need the subsidies. Application in the Singapore context. Demonstration of an understanding of what Singapore does and why it does it. Education may be under-consumed, especially by the less well off. This is bad for the individual and bad for society, and may also be regarded as unfair. How a combination of legislation and subsidies can make things better. Theoretical coverage of the policies on education. Merit Good, positive externality and equity. Why the free market will yield an unsatisfactory outcome in terms of misallocation of resources welfare loss. Evaluation E2 More sophisticated evaluation, e.g. the picture is always changing so what may be appropriate now may become inappropriate as conditions alter. Maybe point out the education policies arent just about economics but also social and political policies, e.g. race issues. Without succumbing to hubris you might point out that the Singapore education is widely admired internationally, so it cant be that bad. Any evaluative comment on whether any govt can ever adopt the most appropriate policies on anything, given that economies are dynamic. 3-4 15-21

L2

8-14

L1

1-7

E1

1-2

Title of Essay: With reference to examples, discuss whether there is a need to change the current policies adopted by the Singapore government to deal with market failure caused by externalities. [25] Content: What is the problem with externality? Market failure, leading to overproduction/consumption of goods with negative externalities, and underproduction/consumption of goods with positive externalities. Singapore policies on externalities? Taxation/subsidies in some cases, e.g. petrol taxes, taxes on alcohol and tobacco, ERP, vaccinations, use of sports facilities, etc. Prohibition/making compulsory of some things, e.g. chewing gum, leaded petrol, BCG vaccination and wearing seatbelts. Campaigns, e.g. drugs, drink-driving, smoking, families, healthy eating, etc. Quotas, e.g. COE and zoning of HDB estates? Knowledge, Application, Understanding, Analysis L3 Some analysis of how effective Singapores policies are. Cant cover all of them, but need to look at the general problems arising and how they might apply to specific policies in Singapore. For example theres always the question of unforeseen consequences, so ERP driving traffic onto Lornie Road in the mornings would illustrate this point. Similarly banning goods may create a larger welfare loss than it solves, e.g. the chewing gum ban. Campaigns may not be able to alter peoples behavior, e.g. families are fun and taking exercise. Singapore policies on externalities? Taxation/subsidies in some cases, e.g. petrol taxes, taxes on alcohol and tobacco, ERP, vaccinations, use of sports facilities, etc. Prohibition/making compulsory of some things, e.g. chewing gum, leaded petrol, BCG vaccination and wearing seatbelts. Campaigns, e.g. drugs, drink-driving, smoking, families, healthy eating, etc. Quotas, e.g. COE and zoning of HDB estates? What is the problem with externality? Market failure, leading to over-production/consumption of goods with negative externalities, and under-production/consumption of goods with positive externalities. Singapore policies on externalities? Policies include: tax/subsidy, legislation, campaigns and permits. Evaluation More sophisticated evaluation, e.g. technology, incomes, population size, tastes are all continuously changing, so Singapores policies on all matters need to be continually reviewed, e.g. no road policy was poor, the ALS was unsophisticated, but an improvement, ERP is better still, but maybe GPS tracking is the way to go now. The policy is right, the details need up-dating! Some overall remark, probably that there are a plethora of policies adopted in Spore, so unlikely that they are all perfect, therefore need to change. 15-21

L2

8-14

L1

1-7

E2

3-4

E1

1-2

Title of Essay: (a) Explain why pollution and congestion caused by cars are likely to cause market failure. [10] Content: Market equilibrium is economically efficient, but negative externality can create market failure. Pollution is a negative externality since the environment bears costs that do not fall on the individual motorist; congestion is a negative externality since drivers slow down others when they decide to drive their cars. Must have a diagram to illustrate market failure. Knowledge, Application, Understanding, Analysis L3 Analysis of the market failure. Most obviously, might consider which of the two is the more significant problem in Singapore or globally, or both. Might consider that pollution is linear, i.e. each additional car adds an additional amount of pollution, whereas congestion is exponential. Might argue that environmentally-friendly cars dont add to pollution, but they still add to congestion. Do something. Use of the two problems to show how negative externality yields market failure. Need to consider the two problems separately to reach top end of this grade. Free market yields an outcome that is not optimal since there are negative externalities in these two cases. 8-10

L2

5-7

L1

1-4

Title of Essay: (b) Discuss whether the Singapore government currently adopts appropriate policies to overcome this market failure. [15] Content: Policies available are taxes/subsidies, regulation, permits and campaigns. Singapore adopts all of these in one form or another. Knowledge, Application, Understanding, Analysis L3 Analysis of individual policies. How effective are they, e.g. are taxes well judged, does COE really hit the desired target, how expensive are ERP gantries, etc.? Is effective the same as appropriate? Maybe the policies are appropriate but the current versions are not very effective. Each of these applied to Spore: (i) ERP, fuel taxes, (ii) leaded petrol banned, (iii) COEs, (iv) campaigns to car-pool and to ride the MRT, (v) constantly improving public transport and extending the reach of the MRT. Policies available: taxes/subsidies, regulation, permits and campaigns. Public transport as alternative. Evaluation E2 Might suggest Spore does more than most countries and is probably more effective than most, e.g. ERP, which is being copied elsewhere. 3-4 9-11

L2

6-8

L1

1-5

Maybe consider whether market failure needs to be overcome? E1 Some sort of big picture statement, e.g. every country faces the same problems, and the same policies are available. A suite of policies is necessary, no quick fix solution. 1-2