中四 試卷 (F4 Economics Past Paper)
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Form 4A, B, C, D, E
Time allowed: 2 hours
Heep Yunn School
Final Examination (2013-2014)
Section A: Multiple choice questions (30 marks)
There are 25 questions in this section. You should mark all your answers on the answer sheet.
You should mark ONE answer for each question. If you mark more than one answer, you will
receive NO MARKS for that question.
is the same as shortage.
can be eliminated if market price of a good reaches equilibrium.
exists because people need to make choices.
exists in a one-man economy.
2. Which of the following statements about goods are correct?
(1) Public goods can be owned privately.
(2) The use of economic goods involves an opportunity cost.
(3) Natural resources are certainly free goods.
(4) Producer goods are used to satisfy human wants directly.
(1) and (2) only
(1) and (3) only
3. Joanne has the following ways to spend this Friday evening:
1. Watching a 2-hour movie which costs her $100
2. Earning $40 per hour for working at a supermarket
3. Earning $45 per hour as a waitress
C. (2) and (4) only
(3) and (4) only
What will be Joanne's opportunity cost of watching the movie?
As compared to a planned economy, a market economy
is worse as income is distributed more unevenly.
has a higher proportion of privately owned resources.
must have a higher interest rate.
D. must have a higher unemployment rate.
Total marks: 107
13-14-F.4 Final Exam- Economics -P.1
The diagram below shows the circular flow of economic activities.
Flows X and Y are
A. final goods and services .…...... households' expenditure
B. labour service total revenue of firms
6. Refer to the following table.
Price of chocolate ($)
C. final goods and services....... household's factor income
D. household's factor income ....... final goods and services
Pocket money ($)
Quantity demanded for chocolate
Which of the following descriptions is correct?
The law of demand is violated as the quantity demanded increases when the price increases.
B. The law of demand is not violated because it is only an exceptional case.
It is consistent with the law of demand as people buy more chocolate when they have more
D. The law of demand is not violated since a factor other than price is not held constant.
Which of the following will lead to a shortage of residential flats in Hong Kong?
The prices of raw materials increase.
New technology to build flats is introduced.
C. The prices of flats are below the equilibrium level.
The supply of land is limited.
8. Which of the following is an example of joint demand?
A. mobile phones and mobile phone chargers
B. beef and leather
C. milk and yogurt
D. fresh chickens and chilled chickens
13-14-F.4 Final Exam- Economics -P.2
(1) gasoline cars
(4) batteries for electric cars
(1) and (2) only
B. (1) and (3)only
The price of electric cars decreases due to technological improvements. This leads to a
decrease in the demand for
battery charge stations for electric cars.
On Mothers' Day, more people would like to buy flowers for their mother. Meanwhile, the
good weather makes more flowers available in the market. Which of the following diagrams
can best explain the above?
(2) and (4) only
(3) and (4) only
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Which of the following would lead to an increase in the price elasticity of demand for
More minibuses run routes similar to that of the bus services.
B. More residents live in the New Territories and require the bus services.
The bus company provides more frequent bus service.
D. The bus fare decreases.
12. The table below shows the relationship between the price and total revenue of good X.
Unit price ($)
Total revenue ($)
Within the above price range, the elasticity of demand for good X is
C. perfectly inelastic
D. unitary elastic
If the government imposes an effective quota on imported shoes, which of the following
statements is correct?
The total revenue of local shoes manufacturers will decrease.
The total revenue of imported shoes manufacturers will decrease.
The price of the local manufactured shoes will decrease.
The price of imported shoes will increase.
14. Selling pirated handbags is
a production because consumers need to pay for the handbags.
a production because it is a kind of service.
C. not a production because it is illegal.
not a production because it only copies the genuine design.
Books in a public library are
private goods ...... when a borrower borrows the books, the amount available to others
private goods...... the books belong to the government
public goods ...... no one possess a full set of private property rights over the books.
public goods ...... no one can prevent others from reading the books
Which of the following about division of labour is correct?
Division of labour is a necessary condition for exchange.
Division of labour makes workers easier to change jobs.
Workers gain experience by repeating the task.
Division of labour is suitable for a market, which has a small demand.
Mr. Leung is the board of director of a listed company. He owns 35% shares of the company
and makes major decisions for the company. In economics, he belongs to
labour ...... he takes part in the daily operation of the company
labour ...... he earns money return from the company
entrepreneurship ...... he controls more than one-third of the company
D. entrepreneurship ...... he may suffer a loss if the business performance is not good
13-14-F.4 Final Exam- Economics -P.4
18. Compared with an office assistant, a doctor has a lower
A. occupational ....... a doctor had spent a long time studying medicine
occupational ...... the opportunity cost for a doctor to change job is higher
geographical ...... it is costly for a doctor to operate a clinic in a different region
geographical ...... it is difficult for a doctor work in another hospital
The law of diminishing marginal returns
exists in the short run only.
exists in the long run only.
is only an assumption.
implies the productivity of workers are not the same.
Which of the following statements about public enterprises is correct?
The Airport Authority Hong Kong is an example of public enterprises.
Public enterprises do not face competition from private enterprises.
Public corporations are directly managed by the government.
Services provided by public enterprises must be free-of-charge.
21. Lucy is the only owner of her company and the company is not a legal entity. Which of the
following statements is correct?
In order to raise capital, she can issue shares.
If the company goes bankrupt, she is personally liable for the outstanding debts.
Her business will be carried on by her family if she dies.
The firm itself has the rights to own properties.
A Chinese restaurant chain has operated a food processing factory in the New Territories to
prepare for the dim-sums. It is an example of
and the restaurant chain can
backward expansion ... increase its market power
backward expansion ... ensure a reliable supply of input
C. forward expansion... improve the corporate image
D. forward expansion collect market information more easily
(1) is where exchange takes place.
(2) does not exist when trade is conducted on the internet.
(3) needs at least a buyer and a seller in order to be formed.
(1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
(1), (2) and (3)
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24. Which of the following concerning a monopoly is INCORRECT?
There is only one seller in the market.
The seller does not know all the information in the market.
C. A monopolist can control both the price and the quantity transacted.
There are no close substitutes of the goods produced by the monopolist.
Refer to the following table about Mr. Lee's factory.
Output (units) Marginal revenue ($)
Suppose Mr. Lee's factory is in a perfectly competitive market. The profit-maximising output
level of the factory is
units and the price of the product is
C. 32... $20
B. 31... $25
Section B (37 marks)
This section contains seven questions. Attempt ALL questions.
Marginal cost ($)
1. Refer to the following information.
In March 2014, Shanghai Disney Resort announced that the first themed land in the park will be
dedicated to Pirates of the Caribbean. This first-ever Pirates-themed land in a Disney park will be
named Treasure Cove.
To improve the production efficiency, Shanghai Disneyland has adopted a 3D immersion
technology to create better design previews. A complicated model can be finished in only eight
hours with this technology as compared with a few weeks or even months in the past.
Explain which TWO of the three basic economic problems are stated in the above source.
Jenny can choose among three different jobs. Her choice of preference is as follows:
: being a teacher in a primary school
: being a secretary in a trading firm
: being a teller in a bank
Suppose her choice of preference remains unchanged. Explain whether her opportunity cost
of choosing to work as a primary school teacher will be affected in the following cases.
(a) If she is told that students are very hardworking in that primary school.
(b) Staff of the trading firm are required to work overtime.
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3. Refer to the following diagram.
(a) Mary said, 'Excess demand exists when the market price is set at P₁ at which the quantity
transacted is at Q₁.' Is Mary correct? Explain.
(b) Describe how an excess demand is eliminated by the price mechanism.
4. Funny Manufacturing International (Hong Kong stock code: 1355) is a toy manufacturer in
(a) Name the types of business ownership of Funny Manufacturing International.
(b) Explain TWO advantages of this type of ownership over a sole proprietorship.
(c) From the viewpoint of the company, state ONE advantage of issuing shares instead of issuing
bonds to raise capital.
5. Facebook has bought the WhatsApp, an instant text-messaging app, for US$19 billion in
(a) To which type of integration does the above case belong? Explain.
(b) Explain TWO motives of this integration.
6. In December 2013, the flag-fall charge for urban taxis increased from $20 to $22. 'As the
increase in the flag-fall charge for each journey is the same irrespective of the distance, the
proportion of long-distance journeys taken will increase.' Explain this argument by using the
law of demand.
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7. Martin is an owner of a flat sold under the Home-ownership scheme. He cannot rent out or sell
the flat in the market unless he pays a premium to the Housing Authority. The amount of
premium approximately equals to the discount he was offered when he first bought the flat.
(a) Identify what private property right(s) Martin possesses before paying the premium. (1 mark)
(b) Explain what private property right(s) Martin does not possess before paying the premium.
Section C (40 marks)
This section contains three questions. Attempt ALL questions.
8. '759 store' is a chain store mainly selling snacks in Hong Kong. It keeps expanding the retail
shop network. As of March 2014, there were 187 shops in Hong Kong. Suppose the following is
the production information of the '759' chain.
Total output (units)
Total cost ($)
(a) How does the above data illustrate economies of scale? Explain.
(b) The '759' chain offers a 20% discount to members on weekends. The total revenue of the store
increased. Explain the change in total revenue with the aid of a demand-supply diagram.
(c) "Whenever '759' chain lowers the price of product X, the other snack retailers will also
decrease the price," a student said. Identify which market structure this situation is most likely
in. Explain TWO features of this market structure.
Mrs. Wong is a shop manager of a Korean cosmetics brand Atude House.
(a) She is asked by the director to suggest possible wage payment methods for the salespersons
of the shop. She suggests the following schemes:
$10,000 per month
$5,000 per month and 1% of the value of products sold as commission
(i) Name the two payment schemes.
(ii) If Mrs. Wong wants to simplify the wage calculations, which scheme should be adopted?
Explain TWO disadvantages of this scheme from the perspective of the firm.
(b) Consumers are often given free samples when they make purchases at cosmetics
Explain TWO reasons to explain why the free samples are NOT free goods.
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10. Fifa World Cup 2014 Brazil will be held in June 2014.
(a) Suppose an engineer observes the following production information in a construction site.
Total Output (units)
Explain which economic principle can be illustrated by the above data.
(b) Refer to the following news:
About 300,000 foreign visitors are expected to visit Rio de Janeiro for the World Cup, according
to Brazil's tourist agency. The hotel room rates increase more than double. Therefore, some
residents in slums are planning to rent out their apartments during the World Cup to offer
cheaper accommodation services.
Explain, with a demand-supply diagram, how the total revenue of hotels would be affected
when visitors turn to rent apartments in slums, and hotels do not adjust their room rates.
End of Paper
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