Ying Wa Girls’ School Mid-Year Test 2013-2014 Economies L hour Class: § 4 B/C/S/Y Section A: Name: Sections B & C: Class: S4() Group b/c Total: Date: 8" January, 2014 Period 2 Total (2/100): Sections B and C (44 marks) Section B: Short questions (22 marks). Answer ALL questions. 1. a) Peter is planning to take a trip abroad in the coming holiday for leisure. His order of preference is as follows: (1) A trip to Europe, (II) Atrip to China and (III) A trip to the U.S. ‘What is 6pportunity’€6st? Explain how his opportunity cost of taking a trip to Europe will change if the risk of terrorist attack in China increases? (4 marks) weed pacha Sed, the. Aheyfadl = cabal. atin. firgeee,. LAME) Ax. dhe. peebesd. co oe . LI) tak oh beat allah. th Lhra ie Meld. dhe. scabs. af. be. — fr C4) CY weber of top, Je ae8 b) Many people join travel tours organized by travel agencies. The tour fees during peak seasons (like summer and Easter holidays) are much higher than those during non-peak seasons. Explain with ONE reason why it could be cheaper to travel during peak seasons despite the higher tour fees. (G marks) en Pobbopaice. 202 ep. th _ Aly) agp. ite eget on rot A oo . An hourly minimum wage of $28 was implemented in Hong Kong since 1 May 2011. “The government shouldiiGt introduce the minimum wage as it will hamper the competitiveness of Hong Kong's economy.” A said. “Afler the minimum wage law is implemented the unemployment rate for unskilled workers will rise.” B said. Explain which of the above is a positive statement and which is a normative statement. (6 marks) Als... Spabrenent.. Ds... ERD. Metemued:...LB). Tiana Ah. Rereed, aeabmerepacgenseth. Sheed. Jit). (25) Fsnplledl tad Ae. daira... 1... wall. Maly aaerirtg.. so A. ene ec tated Ady. fase. sal Ava. ampasares IF... tk eee fot. —o3 Wt prea Mp baveries Mo prectirhn= , 2 rb.(13) Sa aa oe fret endl, Pb 3. Inthe Policy Address 2011-12 the government proposed that elderly people would be allowed to travel on general MTR lines at a concessionary fare of $2 per trip. a) What problem(s) of resource allocation is/ are involved in this situation? Explain. (4 marks)10 b) How would you expect the ratio of long-distance trips (LD) to short-distance trips (SDT) taken by the elderly to change after the proposal is implemented? Explain in the context of the law of demand. (5 marks)Section C: Structured questions. (22.narks). Answer ALL questions. 4 The Hong Kong government plans to introduce the “Hong Kong Property for Hong Kong Residents” policy. The flats built under the policy can only be sold to Hong Kong permanent residents within 30 years. a) What are private property rights? Explain why the private property rights over these flats may be weakened under this policy. (5 marks) ee P, eke py. BUMS. CPPRS)..drebdu.. el (2... Bectasia.. aged Aa... the Bs... _ eh plead abel Bek. ve dually daybess ia. ae Algs.., athe. oe ex pa proof ded eb b) Compared with similar flats in the same district without the reselling restriction, would the price of the flats under this policy be higher or lower? Explain with the aid of a demand-supply diagram. () ¢.45;>/o/ fe ds ) (5 marks). Luyldt....do...Arevefes, } = oe seofec..dulnsccbap..ote.dsrerbreed...\, "a cena ob eg3 §- Suppose the HKSAR government announces the fesale"Gf housing under MHENMGiie ‘At the same time “the property market in the near future. C slag) a) Explain how the demand for private housing is affected, (3 marks) ae 2 Denaad..for..groval..flas (Ne 1 Seif tendyaetoy S b) Explain how the supply of private housing is affected. (3 marks)Wie. ) Explain why the market price of private housing would increase with the aid of a demand-supply diagram, (6 marks) fF _ Dry U2) er ete S54 (12) Po bSs>4DD (12) Pt cia) End of Paper