Tuen Mun Catholic Secondary School

Form 6 NSS Economics Assignment 3 (Deadline: March 11, Friday, Day6)

Name: ____________ Class:6 ____ Class No:_____ Date:__________ Marks:_____/68
1. An increase in an effective quota in the market of a good would lead to a reduction in deadweight
loss. Do you agree? Explain your answer with the aid of a diagram. (6 marks)

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2. Country A has imposed an effective price ceiling on Good X. Suppose the effective price ceiling is
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now lowered. Will the change in price ceiling improve economic efficiency? Explain your answer
with the aid of a diagram. (4 marks)
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Unit price __________________________________________

D __________________________________________
S
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Pb

3. Figure 1 shows the market supply and demand curves of good X. Suppose the government raises the
Pa
F.6 NSS Eco. Assignment 3 /P.1
S
D
Quantity
 price floor from Pa to Pb.
Figure 1

With the aid of Figure 1, explain whether the rise in the price floor could enhance economic
efficiency. (6 marks)
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4. Suppose the government grants a unit subsidy on the production of Good Y.
(a) With the aid of a diagram, explain how the equilibrium price and the quantity transacted of
Good Y will change as a result of the subsidy. (3 marks)
(b) “A production subsidy benefits both consumers and producers. Hence, a production subsidy
will increase total social surplus.” Explain, with the aid of the diagram in (a), why this
statement is wrong. (5 marks)

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5. (a) What is “deadweight loss”? (2 marks)
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F.6 NSS Eco. Assignment 3 /P.2
 (b) A teacher said, “An effective price floor may increase the producer surplus.”
His student relied, “If this is the case, the price floor may enhance economic efficiency!”
(i) Do you agree with the teacher? Illustrate your answer in Figure 1. (3 marks)
Diagram for (i):

Price

Pf

Figure 1

D
Quantity

(ii) Do you agree with the student? Explain your answer with the aid of Figure 2. (5 marks)
Diagram for (ii):

Price

Pf
Figure 2

D
Quantity

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6. Housing developers spent more resources in the building of small-sized housing units in view of a
rising in price of small-sized housing units in the market. Explain the function of price involved. (2
marks)
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7. Multiple Choice Questions (32 marks)

Please tick () as appropriate

F.6 NSS Eco. Assignment 3 /P.3

Book 5 Answer 100% sure 50% sure 20% sure guess at random
1. Textbook P.193 #1

2. Textbook P.193 #2

3. Textbook P.193 #3

4. Textbook P.193 #4

5. Textbook P.193 #5

6. Textbook P.194 #6

7. Textbook P.193 #8

Book 6 Answer 100% sure 50% sure 20% sure guess at random
8. Textbook P.129 #5

9. Textbook P.130 #6

10. Textbook P.130 #7

Book 3 Answer 100% sure 50% sure 20% sure guess at random
11. Textbook P.36#1

12. Textbook P.36 #4

13. Textbook P.36 #5

14. Textbook P.36 #6

15. Textbook P.37 #8

16. Textbook P.37 #9

17. Textbook P.37 #10

18. Textbook P.37 #11

19. Textbook P.38 #12

20. Textbook P.38 #13

21. Textbook P.38 #14

22. Textbook P.38 #15

23. Textbook P.73 #1

24. Textbook P.73 #2

25. Textbook P.73 #3

26. Textbook P.73 #5

27. Textbook P.74 #6

Book 3 Answer 100% sure 50% sure 20% sure guess at random
28. Textbook P.74 #7

29. Textbook P.74 #8

F.6 NSS Eco. Assignment 3 /P.4

30. Textbook P.74 #10

31. Textbook P.74 #11

32. Textbook P.75 #12

F.6 NSS Eco. Assignment 3 /P.5