G9 Economics Summer Task

Hello! Over the summer, please complete this holiday homework packet to give you some
understanding of the key words and concepts needed for the subject. This will help us to learn
faster.
Instruc@ons for each chapter: - Read the first three chapters of the
electronic coursebook.

- Answer the [email protected] can write down your answers or type.

- Finish the mul@ple-choice ques@ons Submit the paper version holiday homework in
your first economics lesson.

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Part I Chapter questions
Ch 1 The economic problem
1. What is the problem of scarcity (4’)

The problem of scarcity is the fundamental concept of economics. It concludes the fact that the
world has finite or limited resources but human beings have unlimited needs and wants. If there
was no scarcity, we would not have the study of economics. This is because economics is the
study of how to best allocate limited or scarce resources to satisfy the unlimited needs and
wants of human beings

For example
Limited resources
1)Oil
2)Gas
3)Water

2. Define the opportunity cost (2’)

The best alternative that we forgo, or give up, when we make a choice or a decision. In more
specific, it indicates the benefits you would gain by choosing a different course of action

Example:
I have 300 yuan,I could use 300 yuan to buy 1 turtle or I could use 300 yuan to buy a fishing
pole. If I use 300 yuan to buy a turtle,then the opportunity cost of buying a turtle is to use the
same amount to buy a fishing pole.

3. Define the production possibility curve (2’)

A PPC represents all combinations of the maximum amounts of two goods that can be produced
by an economy, given its resources and technology, when there is full employment of resources
and efficiency in production. Two conditions must be met to be considered as PPC.
All resources must be fully employed
All resources must be used efficiently

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4. Draw the graph of production possibility curve (4’)
Fishing Play
（Number basketball
of （Number
fishes） of shots）
50 0
45 20
35 40
20 60
0 80
90
80 0, 80
70
Play basketball

60 20, 60
50
40 35, 40
30
20 45, 20
10
0 50, 0
0 10 20 30 40 50 60
Fishing

5. Explain the causes of the positive and the negative economic growth (6’)
In a particular time point, a country cannot produce the amount that is outside the Production
Possibility Curve (PPC). However, over a period of time, the quantity of output produced in an
economy might increases due to several reasons.
 Increases in the quantity of resources
 Improvements in the quality of resources
 Technological improvements
 Improved efficiency

A country’s economic growth could also be negative where the PPC shift inwards. Causes for the
negative economic growth are as follows.
1) Resources depletion
2) Reduction in productive potential
a) Change in weather patterns
3) Reduction in qualified human resources
a) Highly qualified , skilled and experienced workers moved overseas

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4) Natural disasters and conflicts

Chapter 2 Economic assumptions

1. Why consumers might not maximise their benefit? (6’)
1) When consumers have difficulties in calculating the benefits of consuming a product
a) Examples … maybe given the same prices and quality
1. Pepsi and coca cola
2. Different brands of mineral water
b) Examples… maybe given different activities, but hard to compare their values
1. Buy turtles and buy fishing poles
2) Some consumers develop buying habits that may affect their ability to make rational
choices.
a) Brand loyalty
1. Nike
b) Lock-in effect
1. Apple
2. Microsoft
3) Consumers are influenced by the behavior of others
a) Adopt buying behavior due to the buying habits of their parents
b) Herd mentality
c) Peer pressure
1. Fishing pole
2. Why producers might not maximise their profit? (6’)
1) Decentralized decision-making  In some organization, business owners sometimes might
delegate decision making rights to others who might have different objectives to those of
the owners
2) Some organization / businesses might have different business objectives
3) Some commercial organization operate as charities also known as non-for-profit
organizations.
4) An increasingly minority of minority of business are being set up as social enterprise
a) A social enterprise is a business that prioritizes social, environmental, or community
goals alongside financial profit. Unlike traditional businesses, social enterprises aim to
address societal issues, such as poverty, education, health, or environmental
sustainability, through their operations. They reinvest a significant portion of their
profits back into their social or environmental mission, rather than distributing them to
shareholders. Social enterprises can operate in various sectors, including healthcare,
education, renewable energy, and fair trade.

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Chapter 3 The demand curve
1. Define
1) Individual demand (2’)
2) Market demand. (2’)

1) Individual demand refers to the various quantities of a good (or service) the consumer is
willing and able to purchase at different possible prices during a particular time period,
given the other conditions unchanged.
2) Market demand shows the total quantities of a good (or a service) in the market consumers
are willing and able to buy at different prices during a particular time period, ceteris paribus.
Market demand is the sum of all individual demands for that good.

2.
1) What causes the movement along the demand curve (6’)
Price causes the movement along the demand curve. Based on an example illustrated below.
It indicates that price and quantity demanded have an inverse relationship. When the price of
ice cream goes up, the demand for ice-cream will fall, vice versa. This is intuitional if you
consider real life situation.

2) Draw the movement up along the demand curve (4’)

unit price
1,400 10, 1,300

1,200

1,000
unit price

800
30, 600
600 60, 383
50, 400
80, 325 100, 300
400

200

-
0 20 40 60 80 100 120
Number of turtles

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 Number of
turtles unit price
100 300
80 325
60 383
50 400
30 600
10 1,300

3.
1) What causes the shift of the demand curve. (6’)
Other factors will cause the shift of the demand curve
1) Change in Income level
2) Price of substitutes
3) Price of complements
4) Fashion and tastes (preferences and tastes)
5) Demographic changes

2) Draw the shift of the demand curve. (4’)

12000
70, 10000
50, 10000
10000
30, 10000
8000 80, 8000 100, 8000
60, 8000
6000
D2 D1 D3
4000

2000

0
0 20 40 60 80 100 120

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Part II Multiple-choice questions
Chapter 1

Chapter 2

Chapter 3

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