Documentos de Académico
Documentos de Profesional
Documentos de Cultura
1988 Micro
1988 Micro
88.1
88.2
In a modern society, women are capable of earning higher real wages than, say, thirty years
ago. This implies that
A.
more women are now employed, and their marginal productivities have declined.
B.
there has been a fall in the demand for domestic maids or servants.
C.
women have become less educated because it now costs them more to go college.
D.
the cost of raising children has increased.
88.3
88.4
Most people in Hong Kong travel on the Mass Transit Railway (MTR) or buses. Suppose the
fares of the MTR increase by 20% while the bus fares remain unchanged. The total fare
revenue will
A.
increase for the MTR and remain unchanged for buses.
B.
decrease for the MTR and increase for buses.
C.
increase for the MTR but may increase or decrease for buses.
D.
increase for buses but may increase or decrease for the MTR.
88.5
88.6
Under which of the following situations will the marginal revenue product of a factor of
production be smaller than the value of its marginal product?
A.
when the quantity of the factor employed decreases, the price of the factor falls.
B.
when the price of the product falls, the quantity of the product demanded increases.
C.
When the quantity of the factor employed increases, the price of the factor rises.
D.
The price of the product is falling over time.
88.7
88.8
88.9
Economic analysis shows that cash subsidies give the subsidized a higher level of preference
than subsidies in kind so the use of cash subsidies is a better policy for society than
subsidies in kind. Which of the following statements about the above quotation is true?
A.
The analysis is positive but the policy deduction is normative.
B.
The analysis is normative but the policy deduction is positive.
C.
Both the analysis and the policy deduction are positive.
D.
Both the analysis and the policy deduction are normative.
88.10
88.11
A sales tax tends to lead to an increase in price. But the price will NOT increase if
A.
the market demand is unitarily elastic.
B.
the market demand is perfectly elastic.
C.
the market supply curve is upward rising.
D.
the market supply is perfectly elastic.
88.12
88.13
If the government maintains farm prices by buying up surpluses or selling to fill shortages,
then farmers would
A.
have a stable income.
B.
face a perfectly elastic demand schedule.
C.
increase output because of the price stabilization programme.
D.
face a unitarily elastic demand curve.
88.14
The following shows the demand schedule facing the only milk supplier who offers free
delivery in a certain area:
Price per bottle ($)
2.00
2.50
3.00
3.50
Quantity demanded per month (bottles)
40
30
20
10
If the supplier now charges $3 per month for the delivery service, regardless of the quantity
delivered, then at a price of $2.50 per bottle, the quantity demanded per month would be
A.
30 bottles.
B.
less than 30 bottles.
C.
more than 30 bottles.
D.
unknown because of insufficient information.
88.15
A.
B.
C.
D.
88.16
Utility
A.
refers to the numbers assigned to rank preferences.
B.
is a measure of satisfaction obtained from consuming economic goods.
C.
is a measure which a government will seek to maximize.
D.
uses a numbering system that must always be positive.
88.17
A restaurant opens near a housing estate. The cooking smell annoys the residents nearby.
Economic analysis indicates that
A.
the residents of the housing estate should be encouraged to sue the restaurant owner.
B.
resource allocation will be more efficient if the restaurant owner pays the residents to
tolerate the smell.
C.
it is more beneficial to society if the government forbids the restaurant to operate
near the housing estate.
D.
the mere presence of the annoying smell does not necessarily represent inefficient
use of resource.
88.18
Competition exists in
A.
capitalist economies only.
B.
socialist economies only.
C.
mixed economies only.
D.
any society.
88.19
88.20
if a luxury is defined as a good for which the income elasticity of demand is greater than one,
then we cannot have all luxuries in the economy. This statement is
A.
true because there must exist at least one good with income elasticity less than one.
B.
true because there must be some necessities in the world.
C.
false because it all depends on what we produce.
D.
false because it all depends on the consumption pattern of the society.
88.21
Economic rent is
A.
a payment which does not affect the availability of a good.
B.
a payment in excess of cost.
C.
a profit obtained without risk.
D.
a payment necessary to keep a resource at its present use.
88.22
(Deleted)
88.23
Under private property rights, the main criterion used to allocate resources is
A.
seniority.
B.
price.
C.
rank
D.
wealth
88.24
88.25
88.26
88.27
88.28
88.29
Which one of the following statements about the law of demand is FALSE?
A.
It cannot be derived.
B.
It cannot be rejected by evidence.
C.
It explains human behaviour.
D.
It has not been rejected by evidence.
88.30
SECTION B1
88.1.
What is the law of demand? Is this law consistent with the Giffen paradox?
(8 marks)
88.2.
The maximum one is willing to pay is value; the maximum one will have to sacrifice is cost.
Why is the word maximum associated with both value and cost?
(8 marks)
88.3.
What is consumers surplus? Can you think of one example in the real world in which this
concept helps to explain pricing behaviour?
(8 marks)
SECTION B2
88.4.
What is monopoly? Does a monopolist have to face competition? Explain.
(8 marks)
88.5
Explain why the marginal cost curve always cuts the lowest point of the average cost curve.
(8 marks)
88.6
SECTION C
88.7
The Hong Kong Cross Harbour Tunnel is often congested and takes time to cross. Time is
valuable. In principle, it is possible to raise the toll to reduce or even eliminate the traffic
congestion.
88.8
(a)
If congestion occurs, explain why a tunnel user will generate a divergence between
private and social costs, and why an increase in toll charges will reduce or eliminate
this divergence.
(7 marks)
(b)
Assume all transaction costs are zero so that the toll may be adjusted by the hour to
reduce congestion; assume further that the total toll revenue received under this
variable-toll system is the same as that of a system where a single toll is used.
(i)
Which of the above systems is more likely to reduce traffic congestion?
Explain.
(5 marks)
(ii)
Which of the above system will result in more tunnel users?
Explain
(5 marks)
(c)
In Hong Kong, a licence is required to operate a taxi, and the number of licences is restricted
by the government. Extra or new licences are issued and auctioned by the government from
time to time, and a licensee may sell his licence in the free market. The taxi fares are also
regulated, although adjustments are sometimes made. During the summer of 1987, the market
price of a taxi licence in Hong Kong reached HK$600 000.
(a)
(b)
What are some of the more important factors which affect the market value of a taxi
licence?
(8 marks)
(c)
(6 marks)
Do you think that these drivers would be more polite if the taxi fares were
not regulated?
(4 marks)
(ii)
88.9
88.10
What change in the regulated fare would instantly turn taxi drivers into
angels? And would this new rate lead to an increase in the market value of a
taxi licence?
(6 marks)
Wage workers may be paid by the hour, by piece rates, by gratuities (tips), or by still other
forms.
(a)
If workers are not monitored or supervised at all, how will they behave under the
hourly-rate system as against the piece-rate system?
(6 marks)
(b)
What do you think are the general characteristics of work that determine the choice
of piece-rates versus hourly-rates? Explain.
(6 marks)
(c)
Why are gratuities (tips) popular in the service sector but not in the sector producing
physical goods or commodities?
(6 marks)
(d)
What do you think is the general reason that explains the adoption of different terms
of payments to workers?
(6 marks)
Two currencies are circulated in China, the Foreign Exchange Certificate (FEC) and the
Renminbi (RMB). The FEC is convertible into foreign currencies at officially controlled
exchange rates; the RMB is not similarly convertible. As a result, although the FEC and the
RMB have the same nominal value, dollar for dollar the FEC is worth significantly more than
the RMB in the black or free market.
(a)
(b)
(c)
In high quality restaurants in Beijing, foreigner are strictly required by law to pay
in FEC while local Chinese pay in RMB, both groups paying the same nominal price
of the same services.
(i)
(4 marks)
(ii)
Is it possible that these restaurants earn more by requiring the two groups to
pay in different currencies? Explain.
(5 marks)
In Guangzhou the enforcement is less strict. As a result, high quality restaurants there
choose to accept either FEC or RMB from any customer. However, in doing so they
charge a substantial premium if a customer chooses to pay in RMB.
(i)
(4 marks)
(ii)
Do you think that these restaurants tend to earn more by accepting either
currency from any customer? Explain.
(5 marks)
SolutionSolution
SECTION A
1D
16 A
2D
17 D
18 D
3B
4D
5B
6B
7D
8D
9A
10 A
11 B
12 A
13 B
14 A
15 B
19 B
20 A
21 A
22 B
23 B
24 D
25 C
26 C
27 C
28 D
29 B
30 C