Example 1

“Over the past few years, Singapore Airlines (SIA) has been increasing the price of its air tickets.”

a) Explain the reasons that may have led to an increase in the price of an SIA plane ticket. [10]

b) Discuss how SIA can use the relevant elasticity of demand concepts to increase its total revenue. [15]

“Over the past few years, Singapore Airlines (SIA) has been increasing the price of its air tickets.”

a) Explain the reasons that may have led to an increase in the price of an SIA plane ticket. [10]

Question Analysis:

Apply the 3Cs (Command, Content, Context) to help you in breaking the question down.

Command Word Directive word that informs you of how the question should be addressed. These
word/words will likely give you an indication of the approach i.e., how to organize
your answer.
[For a list of command words- refer to pg 33 of the Essay Skills Revision Package]
Content These are the key words and phrases that indicate to you which
concepts/framework/content should be used to respond to the question

Questions to consider:
What is/are the relevant Economic concepts required to answer question?
Which tool of analysis would be relevant?
Are there other keywords to look out for? [e.g. sharp rise in price]

Context What is the context on which the question is based?

This may include speci ic markets, countries, economic agents (consumers, producers,
government) or for macroeconomic questions the state of the economy.

Questions to consider:
What is/are the relevant market or country to consider?
Are there specific conditions or characteristics to be included?
“Over the past few years, Singapore Airlines (SIA) has been increasing the price of its air tickets.”

a) Explain the reasons that may have led to an increase in the price of an SIA plane ticket. [10]

3Cs 2Rs
Question Analysis:

Command Word
Explain Approach - The use of cause-process-effect

Content Demand and supply, WETPIGS and EGYPTPOP concept to deduce the reason for rising in price.
Eg: supply of air ticket increases causes the price of air ticket to decrease. taste and preference , people
prefer boarding SIA, demand of SIA air tickets increases, price will be adjusted to increase PAP
Context
Producers, consumers, SIA plane ticket, there is no region context,

Task: Identify the two requirements for the question above.

Requirement 1:

Non-price determinant of DD

Requirement 2:

Non Price determinant of SS

 Applying P-E-E-L to paragraph writing
The PEEL model helps in providing a structured approach for constructing paragraphs and serves as a useful
framework for the organisation of thoughts and arguments within each paragraph of an essay.

Point Topic sentence or main idea that answers the question.

Explain/ Elaborate Economic concept that underlies topic sentence. You should
use relevant tool of analysis to support your point.
Example This would be in the form of real-world example or from
preamble
Link Demonstrate how example and concepts mentioned supports
overall argument.

Explain both the demand and supply factors using this structure:

Point What is the factor that impacts the price?

Explain/ Elaborate How does the factor affect demand/supply?
Example How can this factor be applied to the context of SIA?
Link Which direction would the demand/supply move and how would it
affect price?

Point Consumers' Income

Explain/ Elaborate When there is increase in consumers' income, the purchasing

power of consumers increases. Assuming that SIA air ticket is a
normal good, the demand for SIA air ticket will increase.

intro - hoq price are determined

Example When the demand increases, the quantity demanded for SIA air ticket will be more than
, overview of DD and SS quantity supplied at orgiinal equilibrium price, therefore, upward pressure will be exerted on
the price of air ticket to remove this shortage. Price of SIA air ticket will increase.

Link
The demand increases