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S.K.H. Leung Kwai Yee Secondary School

S.K.H. Leung Kwai Yee Secondary School. 2006-07 First Term Examination F. 5 Economics Paper 1.

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S.K.H. Leung Kwai Yee Secondary School

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  1. S.K.H. Leung Kwai Yee Secondary School 2006-07 First Term Examination F. 5 Economics Paper 1

  2. 1.As we all know that Mr. Lee KaShing is one of the wealthiest people in Hong Kong. He is so rich that he is able to buy most of the things he wants.(a.)An economic student said that since Mr. Lee is so rich, he does not face the problem of scarcity. Do you agree with that economic student? Explain. (3 marks) • No. (1) • scarcity is a situation where the availability of resources is insufficient to satisfy all wants. (1) • although Mr. Lee is very rich, he may still have some wants, such as better health or love from others, cannot be satisfied by his wealth. (1)

  3. (b.) Because he is so wealthy, Mr. Lee is able to buy a multiple-way round the world air ticket and travel any place he wants. If finally Mr. Lee decides to go visit Canada in the coming summer holidays, explain whether his opportunity cost of traveling Canada is zero. (3 marks)

  4. (b.) Because he is so wealthy, Mr. Lee is able to buy a multiple-way round the world air ticket and travel any place he wants. If finally Mr. Lee decides to go visit Canada in the coming summer holidays, explain whether his opportunity cost of traveling Canada is zero. (3 marks) • No. (1) • opportunity cost is the highest-value option forgone. (1) • although Mr. Lee can travel any place he wants, as long as he needs to give-up any other option, such as going to other places or doing other things, in order to go visit Canada in the coming summer holidays, his cost to Canada is not zero. (1)

  5. Other Countries $60 million Local Computers Factories Local Wholesalers $50 million $70 million Local Consumers $55 million ($2.5 million sales tax inclusive)

  6. Other Countries $60 million Local Computers Factories Local Wholesalers $50 million $70 million Local Consumers $55 million ($2.5 million sales tax inclusive)

  7. Other Countries $60 million Local Computers Factories Local Wholesalers $50 million $70 million Local Consumers $55 million ($2.5 million sales tax inclusive)

  8. Other Countries $60 million Local Computers Factories Local Wholesalers $50 million $70 million Local Consumers $55 million ($2.5 million sales tax inclusive)

  9. Price ($) S P1 P2 D1 D2 Quantity (units) 0 Q2 Q1

  10. Price ($) S P1 P2 D1 D2 Quantity (units) 0 Q2 Q1

  11. Price ($) Gain > Loss S2 S1 P2 GAIN P1 LOSS D Quantity (units) 0 Q2 Q1

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