SAJC_H2_ECONS_P1_(Answers)

St. Andrew’s Junior College Economics Department JC 2 Preliminary Examinations (2014) Suggested Answers H2 Economics Paper 1 (Syllabus 9732)

Question 1 (a) (i) With reference to Table 1, compare the prices of Premium tickets to Fencing and Swimming events. [2] Similarity: The preliminary ticket prices were lower than the tickets for the finals.[1] Difference:  The ticket prices for Swimming event were higher than for Fencing [1]  The percentage difference between preliminary round and final round is higher for swimming than fencing. [1] {do not award marks if students merely state that the difference is greater for swimming compared to fencing, because this shows absolute and not relative comparison of prices} (ii) Explain two possible reasons to account for your observations in part (a)(i). [4] Justification for the similarity Similarity: Higher demand for tickets to finals as compared to the demand for the tickets to preliminary events. Reason: [Taste and Preferences] Spectators would prefer to attend and watch the final events as final events are usually more exciting and they would be able to witness their favourite idols winning the championship during the event. Or Similarity: Higher supply of tickets to preliminary events compared to the supply of tickets to Final events Reason: The number or preliminary events is greater than the final events of each sport. Justification for the difference Difference: Higher demand for tickets to Swimming events compared to the demand for tickets to Fencing events Evidence in Extract 1 “demand was greatest for ….as well as the popular sports of … swimming and artistic gymnastics” Reason: [Taste and Preferences] Due to the popularity of the swimming event, spectators would prefer to attend and watch swimming events. Or Difference: Lower supply of tickets to Swimming events compared to the supply of tickets to Fencing events Evidence in Extract 1 “costs of maintaining of these pools were rather high.” Reason: Due to higher cost of holding the Swimming event, supply of swimming tickets would be lower than that of the Fencing event. This lower supply would in turn result in higher ticket prices for Swimming event. This shows that LOCOG had passed on the high er cost in terms of higher prices to the consumers. Mark Scheme 2 marks – For any one well-explained factor for the similarity 2 marks – For any one well-explained factor for the difference

(b) With reference to Table 1, explain whether the differences in price charged for the same session of each sport event could be considered to be an example of price discrimination. [4] Yes [2 marks] 1. The cost of hosting the event (e.g. ushers, ticket managers) does not vary for different spectators. 2. There might also be no perceived difference as all spectators are entitled to view the same sporting event. Thus, it can be viewed as an act o