TWGHs Mrs.

Wu York Yu Memorial College

First Term Examination (2021– 2022)
Form: 4 Subject: Economics Paper 1

Time Allowed: 8:30 am-9:30 am (1 hour) Exam No : ________________

Date: 12/1/2021

No. of pages: 12 (the front page included)

Instructions

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required in the spaces provided.

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words “END OF PAPER” after the last question.

3. ANSWER ALL QUESTIONS. All the answers should be marked on the

Answer Sheet.

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answers will score NO MARKS.

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This material was reproduced under the terms of a licence granted by THE HONG
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copying permitted.
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 There are 45 questions. Choose the BEST answer to each question.
1. Which of the following statements is correct?
A. Competition is the result of discrimination.
B. There is no competition for a free-of-charge good.
C. In a Robinson Crusoe (i.e., one-man) economy, scarcity does not lead to
competition and discrimination.
D. None of the above.

2. Which of the following is correct about a free good?

(1) Its quantity is sufficient to satisfy all human wants for it.
(2) It must be free of charge.
(3) All free-of-charge goods must be free goods
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
3.
The Hong Kong government proposes to build new towns with residential flats and shopping
malls in the North District. However, some people are also worried about the size of shopping
malls, which may mainly serve mainland tourists.
The above case is related to the __________ question(s) in Economics.
A. "for whom to produce"
B. "what to produce" and "how to produce"
C. "what to produce" and "for whom to produce"
D. "how to produce" and "for whom to produce"

4. Patrick has accepted Joyce’s invitation to lunch at a Chinese restaurant. Patrick

has no opportunity cost of going if
A. Patrick pays the bill.
B. the quality of the food in that restaurant is excellent.
C. Joyce pays for him.
D. Patrick has nothing else to do.

5. Compared to a command economy, a market-oriented economy has

A. a less even income distribution
B. keener competition for goods and services
C. more production guided by price signals

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 D. no problem of scarcity
6. David is choosing between two ways of spending his summer vacation : to take a
summer job or to join an exchange programme to the United Kingdom. Which of
the following will increase his opportunity cost of taking the summer job ?
A. The fee for the exchange programme increases.
B. The summer job pays a higher salary.
C. A very attractive course is added to the exchange programme.
D. Less training for the summer job is provided.

7. Which of the following statements about interest is correct?

A. Interest exists because people are impatient.
B. Interest does not exist without money.
C. An increase in interest rate increases present consumption.
D. Interest is the cost of deferring consumption of goods and services

8. Which of the following are positive statements?

(1) The HKSAR government should build more public housing for the public
(2) Hong Kong is not a fair society since poor people cannot find good jobs.
.(3) When the value of the chosen option decreases, the opportunity cost of
choosing that option does not change.
(4) Interest does not exist without money.
A. (1)and (2) only
B. (1)and (3) only
C. (2)and (4) only
D. (3) and (4) only

9. Refer to the following circular flows of an economy.

Flow H Money flow
Households Real flow

Firms

Flow H most likely refers to _______.

A. factor income
B. factor service
C. expenditure on goods and services
D. goods and services

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10. In Hong Kong, which of the following is / are the right(s) of an owner of a public
housing unit?
(1) The exclusive right of living in the unit for residential purpose
(2) The exclusive right of earning income by renting out the unit
(3) The exclusive right of transferring the unit
A. (1) only
B. (1) and (2) only
C. (2) and (3) only
D. (1), (2) and (3)

11. The following pie charts show the employment distribution of primary,
secondary and tertiary industries in an economy in two years:

Based on the above information, we can conclude that

A. The relative importance of secondary production has decreased in terms of
employment.
B. Tertiary production has become more important in terms of contribution to
total output.
C. The number of people engaged in primary production remained the same in
the period.
D. More people are engaged in tertiary production in year 2 than in year 1.

12. Milk found in Starbucks can be classified as

A. a consumer good if it is sold to McDonald’s as an ingredient for McCafé
coffee.
B. a producer good if it is used to make Starbucks’ coffee.

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 C. an economic good if more is not preferred
D. a free good if it is provided free of charge at Starbucks.

13. The operator of a canteen in the government headquarters decides to sell sushi and
not burgers anymore because the former can earn a higher profit. This is an
example of using__________to solve the problem of __________.
A. government command ......‘what to produce’
B. government command ......‘for whom to produce’
C. market mechanism ......‘what to produce’
D. market mechanism ......‘for whom to produce

14. Mr. Wong owns a shop selling flowers and he does not employ anyone to help
him.Which of the following is INCORRECT?
A. He is a secondary producer.
B. He is a tertiary producer.
C. He provides entrepreneurial skills.
D. He provides labour service.

15. In a restaurant, workers are assigned different jobs: cleaners, cooks, waiters, etc.
This can be described as
A. regional division of labour
B. complex division of labour.
C. occupational mobility of labour.
D. geographical mobility of labour.

16. Which of the following is an advantage of division of labour ?

A. A wider choice of goods and services can be provided.
B. Workers have a greater incentive to work.
C. Workers have higher occupational mobility.
D. None of the above.

17 Which of the following is classified as ‘land’?

A. A dolphin at Ocean Park C. A lobster in the sea
B. Rainwater collected in a reservoir D. A police dog

18. Which of the following will increase the occupational mobility of labour?
A. More re-training programmes are offered to workers.
B. The transport and communication network is improved.
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 C. Travelling subsidies are provided for low-income workers.
D. More jobs require licence and professional qualifications.

19. Which of the following will reduce the labour supply in Hong Kong?
A. Increase the retirement age from 65 to 70.
B. Lower the legal school-leaving age.
C. Provide more day care services for children.
D. Increase the number of public holidays.

20. Some gold and jewellery shops pay their employees a basic salary plus year-end
bonus because this can
(1) raise the working incentive of the employees.
(2) share part of the business risk with the employees.
(3) maintain a basic team of staff
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)

21. The average productivity of labour will increase if

(1) there is an increase in the number of machines.
(2) there is an increase in the size of labour force.
(3) there is an improvement in the health conditions of workers.
(4) workers work more hours per day.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (4) only
D. (3) and (4) only

22. A factory owner observed the following results after changing the method of
payment to his workers:
Old system New system
Output per worker (per day) 200 units 400 units
Output with quality below standard 30 units 80 units

Most probably the old system is ______ and the new system is ________ .

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 A. time rate ... piece rate
B. piece rate … time rate
C. a profit sharing scheme … time rate
D. time rate … a profit sharing scheme

23.
Factory A Factory B
Number of workers employed 10 50
Total number of working hours 100 50
Total output (Units) 20 000 21 000

Which of the following is a possible reason for the difference between the labour
productivity of Factory A and Factory B?
A. The workers working in Factory A are healthier than those working in
Factory B.
B. The quality of capital goods used in Factory B is lower.
C. Factory A offers better promotion prospect and fringe benefits to its
workers.
D. Factory A pays its workers at time rate while Factory B pays at a profit-
sharing scheme.

24. Suppose the wage payments system of the salesmen employed in ABC Company
changes as follows:

Salary: Salary: $7000 per month plus

$15000 per month commission

It results in:
A. a lower cost of calculating the wage payments.
B. a lower cost of monitoring the salesmen’s performance.
C. a lower income for the salesmen.
D. a lower quality of services provided by the salesmen.

25. In order to attract more foreign professionals to work in H.K., some firms plan
to provide a housing allowance for them. This would _______ the ________ of
these foreign professionals.
A. reduce … occupational mobility

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B. increase … occupational mobility
C. reduce … geographical mobility
D. increase … geographical mobility

26. Who has the lowest occupational mobility below?

A. A clothes salesperson
B. An accounting clerk
C. A security guard of a shopping mall
D. A football player

27. Refer to the table below.

Factory A Factory B
Number of workers 10 9
Total working hours of workers 80 90
Total output (units) 20 000 20 100

According to the data in the above table, ________________ has a larger labour
supply and ________________ has a higher labour productivity.
A. Factory A ... Factory A
B. Factory A ... Factory B
C. Factory B ... Factory A
D. Factory B ... Factory B

Study the supply-demand schedule of good X and answer Questions 28 and 29 :

28. When the price of good X is $80, there will be ___________ of ___________ in
the market.
A. an excess supply … 4 units
B. an excess supply … 6 units
C. an excess demand … 4 units

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 D. an excess demand … 6 units

29.When the price of good X is $80, the quantity transacted is

A. 18 units
B. 22 units
C. 20 units
D. None of the above

30. Study the following advertisement carefully:

Sparta Sportswear
Up to 30% off on all items
According to the law of demand, the above promotion method can ___________
of/for products in the above sportswear shop.
A. increase only the quantity demanded
B. increase only the demand
C. increase both the demand and the quantity demanded
D. increase the demand but reduce the quantity demanded

31. Study the following table.

Unit price ($) Quantity demanded (units) Quantity supplied (units)
8 1,200 700
9 1,000 1,000
10 800 1,300
Which of the following is correct?
A. The equilibrium price is $9.
B. The equilibrium quantity is 1,000 units.
C. The shortage is 500 units when the price is $8.
D. All of the above

32. Which of the following statements about excess demand is INCORRECT?

A. It means the quantity demanded is larger than quantity supplied in the market.
B. It exists when the market price is below the equilibrium price.
C. When there is excess demand, the quantity transacted equals the quantity
demanded in the market.
D. There is a tendency for the price to rise.

33. The demand for ________ can be regarded as a derived demand for _________

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 A. coffee beans …. coffee
B. selfie sticks (自拍杆) ….. mobile phones
C. chicken wings …….chicken legs
D. newspapers ……. printing paper

34. Which of the following pairs are in competitive demand?

A. Beef and pork
B. Printer and paper
C. Chair and wood
D. Coffee beans and coffee

35. Which of the following pairs are in joint demand?

A. Beef and pork
B. Printer and paper
C. Chair and wood A
D. Coffee beans and coffee

36. Which of the following is assumed to be constant when the market demand curve
of a good is derived?
(1) Quantity demanded of the good
(2) Price of the good
(3) Consumers’ income
(4) Price of related goods
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (3) and (4) only

37. Suppose chicken and pork are substitutes for each other. If the price of chicken
increases, the demand for pork would
A. increase.
B. decrease.
C. remain unchanged.
D. be uncertain.

38. If the price of DVD players increases, the price of DVDs would
A. increase.
B. decrease.
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 C. remain unchanged.
D. be uncertain.

39. If an increase in income leads to a decrease in the demand for good X, then good
X will be
A. a necessity.
B. a superior good.
C. a normal good.
D. an inferior good.

40. Which of the following CANNOT lead to an increase in demand for a good?
A. An increase in income
B. A decrease in income
C. An increase in the price of its substitutes
D. An increase in the price of its complements

41.Which of the following will NOT increase Hong Kong people’s demand for
beef?
A. The price of beef decreases
B. The price of pork increases
C. Hong Kong people’s income increases
D. None of the above

42. “Owing to the increasing demand for bread, the demand for flour also increased.”
This shows an example of
A. joint demand
B. competitive demand.
C. derived demand.
D. inferior goods

43. The following shows the effect of a fall in the price of Good X on the demand for
Good Y.

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 Price Price

D D0 D1

Quantity Quantity
Good X Good Y
Good X and Good Y respectively are most likely
A. DVD players and DVDs
B. beef and leather
C. apples and oranges
D. None of the above

44. The following diagram shows the market of hotel accommodation (住宿) services
in Hong Kong.
Room charge ($)

D1
D2
Quantity of hotel
0 accommodation services

If ______________, the demand curve will shift from D1 to D2 in the above

diagram.
A. the room charge of hotels in Hong Kong increases
B. the room charge of hotels in Hong Kong decreases
C. the room charge of hotels in Macau increases
D. the room charge of hotels in Macau decreases

45. In which of the following pairs does the demand for the first good create a
derived demand for the second one?
A. Aviation service and pilots
B. West Rail Line train service and Light Rail train service
C. Blu-ray discs and Blu-ray disc players
D. Hong Kong Disneyland and Ocean Park Hong Kong

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END OF PAPER

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