2013_NYJC_H1_Econs_Essay_Q3_and_Qn4_Suggested_Answers

1    2013 NYJC H1 Prelim Suggested Answers to Essays 3. From June 1st 2013, there will be a cap imposed on the number of times financially vulnerable patrons visit a casino each month. Administered by the NCPG, the Casino Visit limit will complement the current Casino Exclusion system by providing another option for individuals and their families to control gambling habits. – Adapted from Channel News Asia 28th May 2013 a. Explain with examples, the factors affecting the demand for and supply of gambling services in Singapore. [10] Synopsis: Candidates are to explain BOTH demand and supply factors that could affect the market for gambling services in Singapore. Please do note that the market for gambling services and the market for casinos are NOT the same. Candidates do not need to show the impact of the changes in the market as the question only requires an explanation of the factors thus just by stating the direction of the shift or movement along the Demand/ Supply curve would be sufficient. The demand and supply factors stated below are not exhaustive and any plausible and accurate explanation of the factors could also be accepted. Possible Non-price Demand Factors: (i) Change in the income levels of people : A RISE in affluence of the people in Singapore could lead to the demand for gamb ling services to increase. This is due to the fact that gambling services is a luxury service thus when people have a higher disposable income, they would consume more of it at all price levels. It would bring about a rightward shift of the demand curve since the rise in income levels is a non-price factor change. (ii) Change in the Government Policies : An implementation of a new government policy to restrict the number of people entering the casino or any other gambling places could cause the Demand for gambling services to decrease. This could cause a leftward shift of the demand curve and it would mean that people would be demanding less of gambling services at all price levels. Possible Demand Price Factor: (i) Change in the price of gambling services : Due to a change in the cost of production of gambling services, it could cause a change in the price of gambling services. Assuming that the cost of pr oduction for gambling services were to increase, then there would be an upward movement along the demand curve. Possible Non-price Supply Factors: (i) Change in price of factor inputs: Due to a change in the cost of production, it could be seen that the supply of gambling services could be affected since the suppliers are now not able to produce as much gambling services. This would be a leftward shift of the SS curve. Example could be a possible increase in the wages for croupiers and also the price of plastic chips. (ii) Change in the number of gambling providers: With an increase in the number of suppliers or gambling