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[15] Question 3 Discuss if the free market is the most efficient way of allocating resources in Singapore. [25] Question 4 Market dominance and immobility of factors of production lead to imperfect market.” Adapted from Daily Mail 26/10/2007 56 . [25] Question 5 “Motorists face more misery at petrol pumps as oil prices hit record high. [25] Question 2 (a) Explain why the presence of traffic congestion is a source of market failure. The government has proposed to use price controls and subsidies to curb the problem. Explain why this may lead to market failure and discuss the economic policies that could be used by the government to correct this market failure.JC Economics (H2) Essay – Government Intervention and Market Failure Question 1 Explain why the level of innovation in markets is likely to be less than desirable and discuss the view that innovation should therefore be solely carried out by the government. [10] (b) Evaluate the relative effectiveness of the current measures by Singapore government to reduce the problem of traffic congestion.

society will have an efficient allocation of resources. [10] (b) Which policies in Singapore would you recommend to another country to reduce the problem of traffic congestion? Justify your answer.(a) Explain why the price of oil would increase. Adapted from Singtel’s Company Profile 57 . Discuss. [15] Question 6 If all individual consumers and producers seek to maximize their own gains. [25] Question 7 Microsoft Operating System runs about 90 percent of personal computers worldwide. The public has for the government to build flyovers to reduce the problem of traffic congestion in the area. These exclusive rights were maintained up to 1997 that ended with the partial liberalization of the telecommunications industry. the Singapore Telephone Board (now Singtel) was incorporated as a statutory board with exclusive rights to operate telephone service within Singapore. (a) Explain whether traffic lights and flyovers are examples of public goods. [17] Question 8 Motorists using the Upper Serangoon Road have to wait for 3 or more traffic light changes before they are able to cross the junctions. [15] Question 9 In 1955. (a) How may a firm such as Microsoft present a case of market failure? [8] (b) Assess he government policies to correct the above market failure. [10] (b) Discuss the effects of government’s intervention in the petrol market on the economy. while its Microsoft Office is the popular choice for all-in-one software.

[25] Question 13 To what extent can the presence of government in the market for health care services improve the allocation of resources? [25] 58 .(a) Explain how the existence of monopolies leads to market failure. The ‘open skies’ deal eases restrictions on air travel between the EU and US airlines and will increase the level of competition in the transatlantic market for air travel. and create up to 80. [25] Question 11 (b) Comment on the economic impacts of government provision of public housing on the Singapore economy.000 new jobs in the EU and US. [10] (b) Discuss the possible measures the Singapore government could have taken to regulate the telecommunications industry in Singapore. Officials said the agreement could generate 26 million more airline passengers over the next five years. BBC (22nd March 2007) Discuss whether the liberalization of the transatlantic air travel market will always lead to an increase in economic efficiency and economic growth. [13] Question 12 The EU has reached agreement with the USA on what is termed an ‘open skies’ deal. Discuss how market failure may arise and the measures adopted by the government in promoting the performing arts in Singapore. [15] Question 10 Performing arts can be seen as a merit good that also generates positive externalities.

whether the Singapore government currently adopts the most appropriate policies in the provision of healthcare.Question 14 Discuss. [25] 59 . with economic reasons to support your arguments.

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