TMJC 2023 A Level H2 CSQ1_AP Answers

2023 A Level H2 Economics (9570) Suggested Answers to Paper 1 CSQ1 © TAMPINES MERIDIAN JUNIOR COLLEGE Question 1: Costs and Benefits of Education (a) With reference to Figure 1, compare the potential benefits for a graduate in the US with a Bachelor’s degree to a school leaver who has a High School Diploma. [2] A graduate in the US with a Bachelor’s degree is likely to earn more than a school leaver with a High school diploma. [1] A graduate in the US with a Bachelor’s degree is also less likely to be unemployed compared to a school leaver with a High school diploma. [1] (b) With reference to Extract 1, and using a supply and demand diagram, explain one possible reason for the higher average earnings of graduates with a Professional degree compared to those with a Bachelor’s degree. [3] From Extract 1, it is indicated that the marginal private cost of HE is relatively high including the opportunity cost of wages forgone. In view of that, the supply of graduates with a Professional degree is likely to be lesser than those with a Bachelor’s degree considering the high cost incurred to pursue a professional degree. [1] This can be illustrated in Figure 1 below where S1 represents the supply curve of graduates with a Professional degree and the average earning is W1 which is higher than the average earning, W2 of those with a Bachelor’s degree with a supply curve indicated by S2. [2m with a correctly drawn diagram] Figure 1: Note: Also acceptable to explain the higher average earnings of graduates with a Professional degree is likely due to its higher demand compared to those with a Bachelor’s degree.

2023 A Level H2 Economics (9570) Suggested Answers to Paper 1 CSQ1 © TAMPINES MERIDIAN JUNIOR COLLEGE (c) ‘Opportunity costs may make even free schooling unaffordable for some families.’ (Extract 4) Explain one example of opportunity cost that might make free schooling unaffordable. [3] Opportunity cost is the value of the next best alternative forgone when a choice is made. [1] When a student pursues education, a student forgoes possible earnings that he/she could have earned if he/she was working instead of schooling. [1] These wages could be essential for the family to survive during the duration of their schooling. The loss of such wages may result in poorer families finding free schooling unaffordable. [1] (d) Explain how asymmetric information may lead to wrong choices in the market for education. [4] Asymmetric information occurs when one party to a transaction, in this case education, has more or better information than the other party. [1] As seen in Extract 4, unlike the government , consumers (parents) may not have enough information to assess the private return on an investment in their children education accurately, or they might not even be aware of the opportunities available , this is