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16-17 X2 S4 Econ MS

The document is a marking scheme for the HKUGA College Economics final examination for the 2016/2017 academic year, totaling 75 marks. It includes multiple-choice answers for Section A and detailed responses for Section B, covering various economic concepts and principles. The exam assesses students' understanding of topics such as supply and demand, market structures, and the impact of changes in economic variables.

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S3CH-14 Choy Pak Ming
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13 views5 pages

16-17 X2 S4 Econ MS

The document is a marking scheme for the HKUGA College Economics final examination for the 2016/2017 academic year, totaling 75 marks. It includes multiple-choice answers for Section A and detailed responses for Section B, covering various economic concepts and principles. The exam assesses students' understanding of topics such as supply and demand, market structures, and the impact of changes in economic variables.

Uploaded by

S3CH-14 Choy Pak Ming
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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HKUGA College

FINAL EXAMINATION
TOTAL MARKS: 75
(2016/2017)
Economics
Marking Scheme
Time allowed: 2 hrs Form: 4

Name: Class (No.): ( )

Section A

1. D 2. B 3. C 4. D 5. C
6. B 7. D 8. D 9. D 10. B
11. A 12. C 13. D 14. C 15. A
16. C 17. D 18. D 19. D 20. A
21. C 22. B 23. B 24. B 25. A
26. C 27. B 28. B 29. B 30. B
31. A 32. D 33. C 34. C 35. D
36. C 37. C 38. B 39. A 40. B

Section B

1. (a) Yes, because 1


it only affects the value of the chosen option, but the value of the highest-valued option
forgone, which is being a management trainee, remains unchanged. 1

(b) No, because 1


if the value of being an executive officer is higher than the value of being a management
trainee, being an executive officer will be the new highest-valued option forgone. 2

2. (a) No, because 1


the quantity of video tutorials available is not enough to satisfy all people’s wants for them. /
more of the video tutorials is preferred. / cost is involved in obtaining the video tutorials. 1

(b) Yes, because 1


- the consumption of these video tutorials is non-rival since the quantity available will
not decrease when others are watching the videos. (2)
- the consumption of these video tutorials is non-excludable since it is costly to prevent
others from watching the videos. (2)

P. 1 of 5
3. When a variable factor is continuously added to a given quantity of fixed factors, the marginal
product (of the variable factor) will eventually decrease (, holding technology constant). 3
Machines (units) Marginal product (units)
4 21
5 20 (2)
OR
When the amount of machines increases from 4 units to 5 units, the marginal product decreases
from 21 units to 20 units. (2)
Therefore, the data illustrates the law. 1

4. (a) Water charges, because 1


it increases (decreases) when a cha chaan teng increases (decreases) its output. 1

(b) monopolistic competition 1


- many small, unassociated sellers (1)
- heterogeneous services (1)
- free entry and exit (1)
- imperfect market information (1)
- non-price competition (1)
- Any other relevant point
[Mark the FIRST THREE points only.]

(c) - a larger firm can borrow from banks at a lower interest rate (2)
- a larger firm with a wider scope of specialization can raise efficiency (2)
- a larger firm can spread its advertising cost over a larger output (2)
- a larger firm can obtain discounts by buying raw materials in bulk (2)
- a larger firm can spread its research expenses over a larger output (2)
- a larger firm can utilize its machines more fully and efficiently (2)
- Any other relevant point
[Mark the FIRST TWO points only.]

(d) Lateral expansion, because 1


cha chaan teng and all-you-can-eat Japanese grill are related but not directly competitive
businesses. 1
- spread risk through diversification (1)
- make use of brand name / promote goodwill (1)
- Any other relevant point
[Mark the FIRST TWO points only.]

P. 2 of 5
5. Verbal elaboration:
- The demand for residential property will increase. 1
- The derived demand for construction workers will increase. 1
- The supply of construction workers will increase. 1
- Condition: The increase in supply is larger than the increase in demand. 1

Indicate on the diagram:


- S↑ 1
- D↑ 1
- wage rate ↓ 1

6. Verbal elaboration:
- When the SMW rate increases, the quantity of security guards employed will decreases. 1
- Condition: The demand for security guards is elastic. 1
- The percentage decrease in quantity of security guards employed will be larger than the
percentage increase in wage rate of security guards. 2
- The total wage earnings will decrease. 1

Indicate on the diagram:


- w m ↑, Q ↓ 1
- increase in wage earnings < decrease in wage earnings 1

P. 3 of 5
7. (a) Verbal elaboration:
- The supply of alcoholic drinks will decrease. 1
- The price of alcoholic drinks will increase, the quantity of alcoholic drinks transacted
will decrease. 1
- Condition: The elasticity of supply is larger than the elasticity of demand. 2

Indicate on the diagram:


- S↓ 1
- consumers’ tax burden > sellers’ tax burden 2

(b) Since smaller-bottled and larger-bottled alcoholic drinks are subject to the same unit tax, the 1
relative price larger-bottled alcoholic drinks (in terms of smaller-bottled alcoholic drinks)
will decrease. 1
According to the law of demand, the relative consumption of larger-bottled alcoholic drinks
will increase, ceteris paribus. 1
Therefore, the Economics student is not correct. 1

8. (a) No, because 1


the liability of owners of CX is confined to the amount they have invested in CX. 2

(b) public limited company 1


Advantages over partnership:
- wider source of capital (1)
- lasting continuity (1)
- separate legal status (1)
- limited liability (1)
- Any other relevant point
[Mark the FIRST TWO points only.]
Disadvantages over private limited company:
- disclosure of financial accounts to the public (1)
- higher risk of being taken over (1)
- Any other relevant point
[Mark the FIRST TWO points only.]

P. 4 of 5
(c) Advantage:
- with voting rights in the annual general meeting (1)
- Any other relevant point
[Mark the FIRST point only.]
Disadvantage:
- lower priority of getting back capital in case of liquidation (1)
- Any other relevant point
[Mark the FIRST point only.]

(d) division of labour 1


- choose the most suitable person for the job (1)
- practice makes perfect (1)
- save time in training (1)
- save time in moving around tasks (1)
- stimulus to mechanization (1)
[Mark the FIRST TWO points only.]

(e) - lower cost of measuring output (1)


- lower cost of quality control (1)
- Any other relevant point
[Mark the FIRST TWO points only.]

(f) Their geographical mobility will increase because 2


they are more willing to move to work in other place. 1

P. 5 of 5

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