ECONOMICS PAPER 1 - DSEPP

2014-DSE

ECON

PAPER 1

HONG KONG EXAMINATIONS AND ASSESSMENT AUTHORITY

HONG KONG DIPLOMA OF SECONDARY EDUCATION EXAMINATION 2014

ECONOMICS PAPER 1

8.30 am - 9.30 am (1 hour)

INSTRUCTIONS

1.

Read carefully the instructions on the Answer Sheet. After the announcement of the start of the

examination, you should first stick a barcode label and insert the in formation required in the spaces

provided. No extra time will be given for sticking on the barcode label after the 'Time is up'

announcement.

2.

When told to open this book, you should check that all the questions are there. Look for the words'END

OF PAPER'after the last question.

3.

All questions carry equal marks.

4.

ANSWER ALL QUESTIONS. You are advised to use an HB pencil to mark all the answers on the

Answer Sheet, so that wrong marks can be��completely erased with a clean rubber. You must mark the

answers clearly; otherwise you will lose marks if the answers cannot be captured.

5.

You should mark only ONE answer for each question. If you mark more than one answer, you will

receive NO MARKS for that question.

6.

No marks will be deducted for wrong answers.

Not to be taken away before the

end of the examination session

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There are 45 questions in this paper. Choose the BEST answer for each question.

1.

A famous football team, Manchester United, visited Hong Kong for a friendly match. The day before the

match, the team found the pitch in the Hong Kong Stadium had been damaged by prolonged rain and it

considered cancelling the match. The opportunity cost for Manchester United to continue playing in such a

poor pitch would

because

A.

B.

C.

D.

2.

Which of the following do(es) NOT exist in a barter economy?

(I)

(2)

(3)

inflation

interest

comparative advantage

A.

B.

C.

D.

3.

(1) only

(1) and (2) only

(2) and (3) only

(1), (2) and (3)

An economic good

A.

B.

C.

D.

4.

increase ...�� there was a higher chance for the players to get injured

increase ... ��the team was likely to have poor performance

remain unchanged ... �� the expense on the visit to Hong Kong had already been paid

remain unchanged ���� the players spent the same amount of time in Hong Kong

is a good with its demand greater than its supply.

brings us more satisfaction than a free good.

is a good whose quantity available cannot satisfy human wants at zero price.

cannot be found free of charge in any economy.

Mei Ho House (���ɘǣ���a public housing block built in the l 950s, was recently graded as a historic building

in Hong Kong. The building was then turned into a hostel which provides double rooms, family rooms and

disabled rooms. The above case is related to the

question(s) in Economics.

A.

B.

C.

D.

"how to produce"

"for whom to produce"

"what to produce" and "how to produce"

"what to produce" and "for whom to produce"

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5.

The following table shows a production plan of a firm which employs two factors only, namely labour and

machinery.

Labour (unit)

I

2

3

4

5

Machinery (unit)

4

4

4

4

4

Total product (unit)

100

12Q

150

170

165

unit of labour is put to work.

The marginal product of labour will start to diminish when the

A.

B.

C.

D.

6.

second

third

fourth

fifth

The following table shows the cost-output relationship of a price taker

Output (unit)

I

2

3

4

5

Total cost ($)

20

45

75

110

150

Given that the profit maximizing output of the firm is 3 units. If the fixed cost increases by$ 5, the price of

respectively.

and

the good and the output will be

A.

B.

C.

D.

7.

$ 25 ...... 2 units

$ 30 ...... 2 units

$ 30 ...... 3 units

$ 75 ...... 3 Units

A public limited company plans to issue new bonds for expansion. For the existing shareholders, which of

the following is an advantage of issuing bonds instead of shares?

A.

B.

C.

D.

The accounts of the company need not be disclosed to the public.

They have priority in getting back their capital if the company liquidate

The interest paid to the bondholders is lower than the dividend paid to the shareholders.

Their power of control over the company will not be diluted

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8.

Which of the following statements about partnership and sole proprietorship is correct?

A.

B.

C.

D.

9.

Which of the following will increase the labour supply of an economy?

A.

B.

C.

D.

10.

Partnership has better continuity than sole proprietorship

Partnership has less flexibility in decision making than sole proprietorship

Partnership has more capital than sole proprietorship

Partnership enjoys more economies of scale than sole proprietorship.

More firms allow male employees to take paternity leave.

More companies offer free transport to employees working overtime.

Universities ,provide more full-time associate degree programmes for secondary school

graduates.

The government adopts maximum working hours for the civil servants.

The following graph shows the relationship of the three stages of production. What do E and F stand for

respectively?

v

��

Psroduction

A.

B.

C.

D.

11.

Primary

Production

41

��

ʬ

Production

consumer goods; raw materials

producer goods; services

raw materials; services

producer goods; raw materials

Which of the following would most likely increase the occupational mobility of labour in an economy?

A.

B.

C.

D.

The labour unions have stronger bargaining power for the welfare of their members.

The labour department provides tuition fee rebates for participants of retraining programmes.

The transport network is improved by the extension of highways.

The government stops granting funding for an online data system about job vacancies

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12.

In which of the following pairs does the demand for the first good create a derived demand for the second

one?

A.

B.

C.

D.

13.

Which of the following would reduce the elasticity of demand for the transport service of the Airport

Express?

A.

B.

C.

D.

14.

Aviation service and pilots

West Rail Line train service and Light Rail train service

Blu-ray discs and Blu-ray disc players

Hong Kong Disneyland and Ocean Park Hong Kong

There are more airport bus routes to different districts.

Vans are not allowed to pick up passengers at the airport.

The fare of the Airport Express is raised.

The maintenance cost of the Airport Express trains increases.

Suppose the equilibrium point of the cosmetic surgery market in Hong Kong is originally at E��. If people

become open-minded to cosmetic surgery while more regulations are imposed on the cosmetic surgery

��

.

industry, the new equilibrium point will be at

Price($)

D1

D2

O'

> Quantity

ElEzEJL

AB C D

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