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Set C Qn 2
Discuss how the opp cost of increased healthcare expenditure…
Set C Qn 2
Discuss how the opp cost of increased healthcare expenditure differs, depending on whether it is financed by individuals or the sg govt. [15]
KW:
- Discuss how: process
- opp cost: benefit of the next best alternative, besides spending on healthcare, forgone
- individuals or the sg govt: what are the differences if financed by these 2?
- you have to a to address the key phrase of the singapore government by bringing in policies on the govt
body
type of opp cost
indiv
- wants to max satisfaction or welfare
- got limited pp
- he has to make a choice on the type of g+s he wants to buy
- eg he has to choose between healthcare and going for a concert
govt
- maximise societal welfare
- got limited funds
- govt has to make a choice on the type of expendigure that they want to spend on
- eg healthcare vs defence
amt of opp cost
indiv
- refers to the total amt of medical bills incurred by the indiv
govt
- the sg govt intervenes in the mkt for healthcare thru subsidies, direct provision of healthcare, legislation and moral suasion etc
- explain how the govt intervenes --> explain the policy
eg
- giving out subsidies/ transfer payments
- govt gives perioidc top-ups to Medisave
- govt awards grants to citizen's medisave accounts
- Legislation
- govt mandates that all children in sg have to undergo basic immunisationduring childhood eg diphtheria and measles
- some part of sgpporeans income has to go oto Medisave, Medishield and Medifund
- Moral suasion
- HPB provides for advertisements to get pple to quit smoking
whether healthcare expenditure is larger or govt financed expenditure is larger, it depends
- depends on whether the effect of more people doing moral suasion is higher or whether the effect of people being more willing to go for chkup etc to prevent future healthcare cost is higher
-
who bears the opp cost
indiv
- opp cost is borne by himslef eg via medisave
- otherwise it could be borne by family members who have less money to finance their own medical needs
govt
- opp cost is passed onto taxpayers
- if the increase in revenue is raised through indirect tax
- current generation faces burden
- if the increase is via direct taxes
- the younger generation would bear the burden
Singapore is likely to increase indirect taxes because an increase in direct taxes will deter individuals from coming to sg to work and deter investors from investing here
This type of MF questions is very unique and difficult and might throw you off, because usually what you will have is an evaluation of policies
Better go and learn this question!!