HKDSE 1 2 3 4 Common Error 考生常犯錯誤大解構 DSE 2015 Paper 2B, 9d GDP DSE 2014 Paper 2A, 7b DSE 2013 Paper 2B, 10c DSE 2015 Paper 2A, 4a DSE 2015 Paper 2B, 11d DSE 2014 Paper 2A, 5c(ii) DSE 2014 Paper 2B, 11a DSE 2013 Paper 2A, 7a DSE 2015 Paper 2B, 11d DSE 2014 Paper 2B, 9a&b DSE 2014 Paper 2B, 11a DSE 2014 Paper 2B, 12c Ms r C&I AD DSE 2013 Paper 2A, 2 DSE 2013 Paper 2B, 9b DSE 2013 Paper 2B, 11 2 DSE Exam Expert: Economics
Chapter 1 Basic Economic Concepts 2 Chapter 1 Basic Economic Concepts 6 Chapter 2 Demand and Supply: Price Determination 12 Chapter 16 Money Market and Monetary Policy 79 Chapter 19 AS-AD Model: Economy in the Long Run and the Short Run 92 Chapter 20 AS-AD Model: Macroeconomic Policy 100 Chapter 3 Price Elasticity of Demand and Supply 13 Chapter 3 Price Elasticity of Demand and Supply 17 Chapter 9 Efficiency, Equity and the Government 48 Chapter 17 Inflation and Deflation 84 Chapter 2 Demand and Supply: Price Determination 10 Chapter 2 Demand and Supply: Price Determination 11 Chapter 19 AS-AD Model: Economy in the Long Run and the Short Run 93 Chapter 19 AS-AD Model: Economy in the Long Run and the Short Run 94 Chapter 9 Efficiency, Equity and the Government 47 Chapter 16 Money Market and Monetary Policy 83 Chapter 19 AS-AD Model: Economy in the Long Run and the Short Run 95 Common Error 3
Distribution of DSE Exam Questions 歷屆經濟科出題趨勢分析 1. Basic Economic Concepts 2012 2013 Paper 1 Paper 2 Paper 1 Paper 2 1, 2, 3 A1 1, 2 A2a, B9b&c 2. Demand and Supply: Price Determination 13, 14, 15 B12c 10, 11, 12, 16 A2b 3. Price Elasticity of Demand and Supply 11, 12, 39 A8 37 B9a 4. Production and the Labour Market 4, 5, 6, 7, 10 6, 7 B10a&b, B11b(i) 5. Short-run and Long-run Production 9 A2 3, 4, 5 6. Ownership of Firms 8 A3, B10a(ii), B12b 8, 9 7. Competition and Market Structure 8. Demand and Supply: Market Intervention 18 B12a 17 A1 16, 17 A5a, A5c 13, 14, 15 B10c 9. Efficiency, Equity and the Government 10. Elective Part 1 Monopoly Pricing 11. Elective Part 1 Anticompetitive Behaviours and Competition Policy 19, 20, 21 A4, B10b 18, 19, 20 C14a, b, c&d C14e A7, B11a&b(ii) C13a&b C13c&d 6 DSE Exam Expert: Economics
2014 2015 2016 Paper 1 Paper 2 Paper 1 Paper 2 Paper 1 Paper 2 1, 3, 4 A1 1, 2, 3 A1 1, 3, 4, 5 A1 12, 14 B10e 10, 13, 14, 15 A4b, B9c, B11d 13, 14, 16, 17, 18 B13b(ii) 13 B11a 11 B11c 15, 45 9, 10, 11 A2a 4, 6, 23 A2a, B10b&c 2, 6, 8, 9, 10 B10b, B13a 5, 6 A2b 9 7 A2c, A3 7, 8 A4, B10c&d 7, 8 A2b, B9a&b 11 A2a&b 17 A2c 20 20 B10a 15, 16 B9 12, 16, 18, 19 19, A9 18, 19, 20, 21, 22, 23 A3 5, 17, 21, 22 A3, A4a, A8, B12d 12, 21, 22 A4, B10c, B11b, c&d C13a, b&c C13a, b, c&d C14a, b&c C13d&e C13e&f C14d Distribution of DSE Exam Questions 7
Demand and Supply: Price Determination * 2.1 Law of demand and law of supply Law of demand This law says, other things being equal, when the price (P) of a good increases, the quantity demanded (Qd) will decrease, vice versa. (Notes: Other things equal: P Qd ; P Qd ) Law of supply It says that, other things being equal, a rise in the price (P) of a good will increase the quantity supplied (Qs), vice versa. (Notes: Other things equal: P Qs ; P Qs ) 2
2.2 Demand and supply determine price Market equilibrium: This is the situation that the quantity demanded (Qd) = quantity supplied (Qs) of a good. Shortage (Excess demand): Qd > Qs at the given price. Surplus (Excess supply): Qs > Qd at the given price. Price Qd Qs Qt* Market status Result $6 8 units Equilibrium The price stays at equilibrium point. $3 15 units 6 units 6 units Shortage = 9 units There are too few of the goods at $3. The price will rise to the market equilibrium price. $12 6 units 15 units 6 units Surplus = 9 units There are too many of the goods at $12. The price will fall to the market equilibrium price. * Qt = Quantity transacted 2.3 Changes in demand When people plan to buy less of a good (not because of a price change), the demand decreases. Qd at every price When people plan to buy more of a good (not because of a price change), the demand increases. Qd at every price 20 DSE Exam Expert: Economics
Factors that can lead to a change in demand Factors (a) Preference (b) Substitutes (Goods of competitive demand) (c) Complements (Goods of joint demand) (d) Derived demand (e) Income Effects Preference for a good Demand Price of a substitute for Pepsi (e.g. coke) Demand (pepsi) Price of a complement of computers (e.g. printers) Demand (computers) Demand for books Demand for paper Demand for bread Demand for flour When income increases, we may demand more of a good (e.g. taxi services) and less of the other good (e.g. bus services). Income Demand for normal goods Demand for inferior goods Income Demand for normal goods Demand for inferior goods (f) Population Population Demand (quantity demanded) (demand) 2.4 Changes in supply When sellers plan to sell less of a good (not because of a price change), the supply decreases. Qs at every price When sellers plan to sell more of a good (not because of a price change), the supply increases. Qs at every price Demand and Supply: Price Determination 21
Factors that can lead to a change in supply Factors (a) Input prices (b) Technology (c) Goods of joint supply (d) Goods of competitive supply Effects Input prices (or factor costs) Supply Technology Supply Goods produced at the same time, e.g. beef and leather. Price of beef Producing more beef Supply of leather Goods that require the same input to produce, e.g. different kinds of crops. Price of corn Land for growing corn Supply of wheat 2.5 Changes in the market price Changes in demand lead to changes in price and quantity Increase in demand: D P + Q Decrease in demand: D P + Q Changes in supply lead to changes in price and quantity Increase in supply: S P + Q Decrease in supply: S P + Q 22 DSE Exam Expert: Economics
60 Market adjustment mechanism from short run to long run Meaning of inflationary and deflationary gaps Market adjustment mechanism in restoring the long-run equilibrium 94 Q Country A relies heavily on imported oil. Suppose the international prices of oil falls significantly. With reference to the market adjustment mechanism from short-run to long-run equilibrium, explain the long-run effect of the above change on the price level with the diagram below. Assume the economy is now at long-run equilibrium and the potential output remains unchanged. (9 marks) 試題參考 DSE 2013 Paper 2A, 4 LRAS LRAS AS-AD Model: Economy in the Long Run and the Short Run 205
SRAS SRAS 0 SRAS 1 P 0 P 1 Indicate in the diagram SRAS shifts to the right (flow 1) (1) P and Y (1) SRAS shifts back to the original position (flow 2). (1) P and Y back to the original positions. (1) Verbal answer Oil prices Factor cost SRAS (SRAS 0 to SRAS 1 ) (1) Short run: Price level (P 0 to P 1 ) and Y (Y F to Y 1 ) (1) Inflationary gap (Y 1 > Y F ) Input prices (e.g. wages) (1) SRAS back to SRAS 0 (1) P and Y back to the original level in the long run. (1) 206 DSE Exam Expert: Economics
95 Q Refer to the diagram below. Assume that Hong Kong was at point E after SARS broke out in 2003. (a) Explain, with the aid of the diagram above, how the Individual Visit Scheme helped to restore the aggregate output of the economy of Hong Kong to its long-run equilibrium. (5 marks) (b) Even without the Individual Visit Scheme or any other government interventions, the market forces will bring the economy of Hong Kong back to its long-run equilibrium. Explain this view with the use of a separate diagram. (6 marks) 試題參考 DSE 2015 Paper 2B, 12b&c Y F AS-AD Model: Economy in the Long Run and the Short Run 207
(a) Indicate in the diagram AD shifts to the right. (1) Y (from Y 1 to Y F ) (1) Verbal answer Exports of services (tourism) (1) AD (from AD 0 to AD 1 ) (1) Y to potential output (from Y 1 to Y F ) (1) (b) Indicate in the diagram SRAS shifts to the right. (1) Y from Y 1 to Y F (1) Verbal answer Deflationary gap (Y 1 < Y F ) (1) Input prices (1) SRAS (from SRAS 0 to SRAS 1 ) (1) Y to potential output (from Y 1 to Y F ) (1) P LRAS SRAS 0 E SRAS 1 AD 0 Y Y 1 Y F Reference Content Market adjustment mechanism DSE 2015 Paper 2B, 12c Explain how market forces will restore the long-run equilibrium without using a diagram. Inflationary gap Factor prices Cost of production SRAS Restore output to Y F 208 DSE Exam Expert: Economics
Data-response Question Classroom 資料回應題實戰室 2019 15 Sample Question (26 marks) Recommended time: 45 minutes Refer to the following information about the Japan economy. Source A: Inflation rates in Japan in 2012-2014 2012 2013 2014 Inflation rate -0.1% 1.61% 2.38% Source: World Bank Source B: Nominal (lending) interest rates in Japan in 2012-2014 2012 2013 2014 Nominal (lending) interest rates 1.4% 1.3% 1.2% Source: World Bank Data-response Question Classroom 285
Source C: Growth rates of M2 in Japan in 2012 2014 2012 2013 2014 M2 growth rates 2.2% 3.8% 3.0% Source: World Bank (a) (i) With reference to Sources A and B, did the realised real (lending) interest rates increase between 2012 and 2014? Explain your answer. (4 marks) (ii) John obtained a 1-year bank loan in Japan at the beginning of 2013 at a fixed interest rate. Would John gain or lose if inflation is unanticipated? Explain your answer. (3 marks) (b) Refer to Source C. (i) Briefly explain how Japan s nominal money supply (M2) and real money supply (M2) changed respectively between 2012 and 2014. (4 marks) (ii) Would the change in the money supply (M2) help to explain the changes in Source B? Explain your answer. (2 marks) (iii) Based on the Quantity Theory of Money, explain how the growth rate of the money supply is related to the growth rates of the price level and the real GDP in the short run. And what would be the growth rate of the real GDP in Japan in 2014? (5 marks) (c) With reference to the sources and your own economic knowledge, discuss generally the possible pros and cons of the policy mentioned in the sources to an economy. (8 marks) 286 DSE Exam Expert: Economics