Web_02M1_eng

Web_02M1_eng - F.5. Econ(1). 01-02. Mock. P.1 Section A...

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F.5. Econ(1). 01-02. Mock. P.1 Section A (40marks) 1. State any 2 functions of money. (2 marks) 2. Suppose an electric company takes over another company that is doing various kinds of business. Identify the type of expansion and explain 2 possible motives for the expansion. (5 marks) 3. Suppose each day the first MTR train delivers passengers free of any charge. (a) Give ONE reason to explain whether or not the free-of-charge MTR train service is a free good in economics. (2 marks) (b) Explain why a MTR train is a capital. (2 marks) 4. The following table shows the balance of payments account of a certain country. $ million Current account 72000 Goods -25000 Services A Factor Income 27000 Current Transfer -11000 Capital and Financial Account -76000 Net errors and omissions 4000 Total sum = 0 (a) Find the value of A. (2 marks) (b) “Given no net errors and omissions, if the current account is in surplus, then the capital and financial account is in deficit. Explain whether this statement is correct. (2 marks) 5. The following table shows the change in the composite price index of country A. Composite price index 2000 January 100 2001 January 90 Given that there is no change in the amount of comprehensive social security allowance, explain how the real income of those people who receive comprehensive social security allowance would change during that period. (3 marks) 6. Explain how each of the following will affect Hong Kong’s GDP. (a) Build immediately a new cross-harbour railway. (3 marks) (b) Raise the employees’ contribution to the Mandatory Provident Fund to 10%. (3 marks) 7. Danny’s order of preference of using his money is shown below. First preference . Deposit in a bank Second preference . Buy an antique Third preference . Donate to a charitable organization Suppose the bank lowers the deposit rate. Explain whether Danny’s opportunity cost
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F.5. Econ(1). 01-02. Mock. P.2 of depositing the money in the bank would change. (4 marks)
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F.5. Econ(1). 01-02. Mock. P.3 8. Explain why the unemployment rate may increase even when the number of employed increases. (4 marks) 9. Suppose the government imposes a per unit tax of $10 on Good A. Use a diagram to show how the equilibrium price, equilibrium quantity and the total revenue (net of tax) will change. (6 marks)
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This note was uploaded on 04/19/2011 for the course ECON 110 taught by Professor Lam during the Spring '11 term at Atlantic PR.

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Web_02M1_eng - F.5. Econ(1). 01-02. Mock. P.1 Section A...

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