finalkey2006F - THE UNIVERSITY OF HONG KONG School of...

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THE UNIVERSITY OF HONG KONG School of Economics & Finance 2006-2007 1 st Semester Examination Economics: ECON1001 A to H Introduction to Economics 1 A to H Drs S Démurger, K F Wong & P Yip December 16, 2006 2:30-4:30p.m. Candidates may use any self-contained, silent, battery-operated and pocket-sized calculator. The calculator should have numeral-display facilities only and should be used only for the purposes of calculation. It is the candidate’s responsibility to ensure that his calculator operates satisfactorily. Candidates must record the name and type of their calculators on the front page of their examination scripts. The exam paper consists of two sections: multiple choices in Section A, and essay questions in Section B. Please answer all questions in both sections. You are advised to allocate your time according to the marks allocated to each section or question.
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- 1 - Section A: Multiple choices (50 questions, one point each, total 50 points) 1. Forest is a mountain man living in complete isolation in Montana. He is completely self- sufficient through hunting, fishing, and farming. He has not been in the city to buy anything in five years. One can infer a. the scarcity principle does not apply to Forest. b. Forest is not required to make choices. c. the scarcity principle still applies because more hunting means less fishing and farming. d. Forest is very satisfied. e. Forest is not rational. 2. The cost-benefit principle indicates that an action should be taken a. if the total benefits exceed the total costs. b. based on flipping a coin or speaking with a psychic. c. if the average benefits exceed the average costs. d. if the net benefit (benefit minus cost) is zero. e. if the extra benefit is greater than or equal to the extra costs. 3. With ATMs it is possible to retrieve cash from the bank at any time. One hundred years ago, one could only get cash from the bank during business hours, say, 9 am to 3 pm. The difference is because a. flexibility was not valued 100 years ago. b. it was impossible to provide 24 hour a day service 100 years ago. c. the cost of providing 24 hour a day service is much lower today. d. government forced banks to become more convenient. e. cash is a more popular means of making payments today. 4. Having a comparative advantage in a particular task means that a. you are better at it than other people. b. you give up more to accomplish that task than do others. c. you give up less to accomplish that task than do others d. you prefer that task over other tasks. 5. Which of the following statements is always true? a. Comparative advantage implies absolute advantage. b. Absolute advantage implies comparative advantage. c.
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This note was uploaded on 10/02/2011 for the course ECON 1001 taught by Professor S.c during the Spring '10 term at HKU.

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finalkey2006F - THE UNIVERSITY OF HONG KONG School of...

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