2024 ASRJC H3 Prelim Suggested Answers

Suggested Answers for H3 prelim paper CSQ1 (a) Explain, with reference to examples from extracts, compare the characteristics between a quasi-public good and a private good. [6] Examples Rivalrous ( difference) Excludable (similarity) City Parks and park connectors as a quasi-public good When not congested, city parks are deemed to be non rivalrous as when person experience the benefit of brisk walking in the park, it will not diminish another of the same amount of experience. . It is possible to exclude some parts of the park to the public. For example, some areas of the park connectors can be excluded from the public when it is under renovation, construction. Healthcare services as a private good It was mentioned in Extract 3 that doctors “order more tests, procedures and surgeries than necessary” and that this is determinantal to the system at large. Healthcare service is rivalrous as consumption of the service by one patient naturally reduces the quantity or service available for the next patient. For example, if a patient is undergoing a surgery in an operating theatre or is being seen to by a doctor for a medical procedure, then another patient would have to wait and would not be able to avail themselves of that service. This why ordering more tests, procedures and surgeries than necessary is determinantal to the healthcare system at large as it reduces the availability and/or the quality of healthcare service to other patients. Healthcare services are excludable as one needs to pay the bills in order to benefit from the service. Those who can’t afford to pay will be excluded from the healthcare provision/service.

(b) Discuss the extent to which traditional economics is useful in explaining how people decide whether to exercise. [8] Introduction : Traditional Economics – Use Cost and Benefit Analysis / Marginalist principle to decide on whether to exercise. Traditional Economics is useful Limitations of TE. • Benefits of exercising: The monetary value of getting fitter and healthier. Extract 2 states that e xercise is known to significantly improve cardiovascular health, blood pressure, and cholesterol and to reduce the risk of developing diseases such as diabetes and osteoporosis (Myers 2003). As such consumer will incur less medical costs and can pay less insurance premium given good health conditions. Moreover, this will improve the health and productivity which will lead to consumers getting better jobs and attaining higher wages. • Costs of exercising: Explicit costs: cost of gym entrance fee, feeling tired from workout. Implicit costs: opportunity cost of exercise is the next best alternative such as gain knowledge from reading/entertainment from TV ( extract 2). MB>MC If the additional benefits of consuming one more unit of exercise is greater than the additional cost of doing it, a person will decid