算四第張九第 日八初月五年午戊
「經濟與公共建議答案
孔繁盛
Suggested Answers to
Economiand Public Affaris
Paper I
HKCEE 1978
SECTION A
1. Describe the possible effects on the, price and quantity exchanged of a normal good in each of the following situations; (a) an increase in demand
for the good; (b)
a new substitute of the good being on sale; (c) government subsidy
Ans.
to the industry produc- ing the good.
(a) An increase in demand for the good will bid up the price of the good, while the supply of the commodity remains constant. Besides, the quantity ex- changed will be higher than before. The main reason is that the constant supply cannot meet with increased demand unless price is higher to attract more quantity supplied." At a new equilibrium price high er than before, the quan- tity demanded will be mat- ched by the quantity supp lied.
(b) A new substitute of the good being on sale will lead to a decrease in de- mand for the good, because some consumers of the good may now shift to use the new substitute.. As a re- sult of a decrease in de- mand for it, less quantity will be demanded at every While price than before.
the supply of the good be- ing constant, some quanti- ties will be unsold. The. sellers of the good will lower their prices to sell out the excess supply until quantity supplied matches with quantity demanded. The result will be that the price will decrease and so does the quantity: exchanged.
(c) When government makes subsidy to the industry producing the good, this means that the production costs of the industry will reduce. At a lower cost of production, producers in the industry will be willingly to supply more quantities at every price than before.. This can be illustrated by a rightward shift of supply curve. As a result of increase in supply in the whole in-
the dustry, the price ul zood will fall and quanti-
ty exchanged rises...
2*
WAH KIU YAT PO
報日僑華
(a) How are bank notes issued in Hong Kong”
(b) What are the functions of money?
c) What properties should money. posses to Iunction eficiently?
Ans.
(a) Bank notes are issued by three commercial banks
the Hongkong and Shang- hai sanking Cor, oration, the Chartered Bank and the Merchantile Bank.
Bank notes are backed by the Exchange Fund, a government account set up in 1935.. Bank notes may only, be issued against holdings of certificates of indebtedness, which are liabilities of the Exchange Fund. ihese certificates are non-interest bearing and are issued and redeem-. ed as the value of notes in circulation rises and falls. The fund receives and makes payment in hong. Kong, dollars through acc-
ounts it holds with the
The note-issuing banks.. fund bears the cost of maintaining the note issue The bulk of the fund's resources are held in a variety of deposits and investments in terms of several currencies,
(b) There are four main functions of money.
1. As a medium of exchange: It is the primary and ear- liest function of money. In a barter economy, it was difficult to have a double coincidence of wants. Money was then introduced to solve this problem. va Since money is created to be generally accepted, ex- change of Foods and serv- ices can thus be facilita- ted by minimizing the in- convenience and wastage of time.
2. As a measure of value and a unit of account? Money can be used as a means of assesing the re- lative values of different kinds of goods, Its divi- sibility also enables it to serve as unit of account, assigning prices to various commodities. Thus money. is useful in the sense that it helps calculation in our daily consumption, production and exchange, 3. As a store of value; A person can accumulate a reserve of money for the purpose of retaining pur- chasing power power in fu- ture. By keeping his ass- ets in the form of money. a person can turn them into whatever assets, he likes.. Thus money is the most liquid asset that it stores up the values of Foods and services, for future uses. 4. As a standard deferrèd payment: The use of money makes it possible for pay- ment to be deferred from ~ the present to some future date. It enables contracts to be made in the present for the future: delivery of goods.
(c) To function effici- ently, money should be generally accepted by the public. If it is not 80, or that the public lose confidence in it, its function as a medium of exchange and a measure. of value will diminish.
To maintain money as a store of value and
a standard deferred payment the prices in the economy should be kept as stable as possible. In times of serious inflation, the value of money will fall.
3. In Hong Kong, the market structure of
(a) water supply, and (b) restaurants
can be considered as exam- ples of monopoly and mono- polistic competition res- pectively, Give reasons for such considerations and describe the features of such markets in Hong Kong.
Ans.
(a) The market structure. of water supply in Kong Kong can be considered as an example of monopoly
According to economic theory, a market is said to be monopoly' if there exista only one firm in the market. The firm, which is called monopolist,
二期星
is the sole producer of the product in question. It controls the supply of the whole industry because it is not only a firm, it is also an industry. It faces no direct competition because there are no other firms in the market. A. monopolist can fix the price and output at any levels he wants, unless the government exerts certain regulations, on him.
Viewed from the above- mentioned characteristics. of monopoly, the market of water supply in Hong Kong can be said as monopoly. because water supply in Hong Kong is solely pro- vided by the Waterworks @ffice run by the govern- ment. It determines the price and controls the quantity supplied of water supply through water res- trictions. Since water is
a necessity and important to local industries, the supply of it is in the hand of the Hong Kong Government.
(b)
In Hong Kong, the: market structure of rest- aurante can be considered as an example of monopo- listic competition because the market features of r restaurants in Hong Kong are very similar to the concept of monopolistic competition, which was introduced by the Professor E.H. Chamberlin in 1946.
First, in monopolistic competition, the products provided by various sell- ers are differentiated, not homogeneous. Pirms are very interested in the way in which the actions of their rivals. affect t their own profits. The food and services provided by restaurants in Hong Kong show differentiation in quality, style, taste, tradename, etc. In order to persuade consumers pre- fer his own product, each. restaurant tries its best. to make its product diff- erentiated from its rivals' by means by advertising activity and remarkable services.
Second, in monopolistic competition, there are many sellers and entry into the market is relatively free. In Hong Kong, many restau- rants can be found. Entry is relatively free, though a license must be obtained from the government in advance. Besides, huge capital is not required in starting the business.
Third, a firm in. mono- polistic competition meets keen competition from a large number of close rivals, even though none of them produces products which are identical with
his own. High prodits earned by an innovative firm can be competed away in the long run because other firms may make their products more similar to his. In the case of local restaurants, a large pro- fit earned by a sucessful restaurant can always induce existing and new firms to produce more similar products to his.
Section B
4.
(a) In the administration of justice in Hong Kong, what principles must be maintained? (b) If a person is burt in a traffic accident, what assistance can he obtain from the Government?
Ans. (a)
In the administration of Hong Kong, the following principles must be maintained.
First, the judiciary must be independent of any party. In Hong Kong, the Governor does not posses the power to appoint and remove all judges. He is also not
allowed to interfer the decisions of the Judiciary.
Second, an accused person remains innocent and no punishment should be imposed on him until he is found guilty in the trial.
Third, to ensure that human right is ensured, trial must be held to an accused person within 48 hours of his arrest in Hong Kong..
Fourth, to ensure that the judgement and decision of
日三十月六年八七九一曆公年七十六國民華中 育教僑華
the Judiciary is impartial," all trials must be held in public where people observe, Fifth, evidences
produced by the prosecutor must be concrete enough so that the trial is fair to the accused..
Sixth, on accused person must have the right to appeal and should be legaly / protected from outside.
disturbances.
Seventh, the verdict must be given by jury compris comprising ordinary citizens. to ensure impartial judgement. (b). If a person is hurt in a traffic accident, he can apply from The Legal Aid Department legal aid in the proceeding and appeal for: claims for personal damages.
To qualify for aid, be must have a reasonable chance of succeeding in his case, and his monthly disposable income and disposable capital:must not exceed $1,000 and $10,000 respectively. If he is. qualified for aid, he will be registered by solicitor and barrister iu private practice, or by departmental Yawyera. If his annual disposable income and disposable capital do not exceed $4,000 and $3,000 respectively, the legal representation he receives will be free of charge. Otherwise his legal cost will be paid graduated contribution by monthly instalments.
5.
(a) What are the social and
economic causes of the decline of the labour force in agriculture and fisheries in Hong Kong?
(b) What assistance does the Government offer to farmers and fishermen in Hong Kong?
Ang.
The following are the
causes of the decline of the labour force in the agriculture and fisheries in Hung Fork. First as a result of raid development of rural areas for industrial and residential uses, the land available for farming has greatly been reduced. This makes the business of agriculture less profitable. and attract less labour force. Second, most of the fishing and farming units in Hong Kong are of family-businesa type. As a result of changes in social values and attitude" toward work, many young family members leave to other industries. Third, as general education is provided to the young generation of farmers. and fishermen, they tend to choose other occupations in urban areas.
The following are the economic causes of the decline of the labour force in the agriculture and fisheres in Hong Kong. First, the increasing wages rates in manufacturing and tertiary
industries have induced labour force to leave the agriculture and fishing industries, Second, the vast supply of crops imported from mainland China and other countries depresses the return to local agricultural producta. AB
a consequence, wages cannot be high enough to attract enough workers to stay in the agriculture industry. (b) | Th
The Government assista farmers and fishermen in Hong Kong mainly though The Agriculture and Fisheries Department.
The department provides
and technical, department advisory services to farmers so that optimum land usuage. is ensured.
The department deals mainly with the economic, social and technological development of the Hong Kong fishing and agricultural industries. It provides technical, development and advisory services to farmers so that optimum land usuage is ensured, It also conducts researchs and experiments directly and indirectly related to the need for information in the attainment of development objectives.
The department has agricultural development officers throughout the New Territories.
They maintain close contact with the forming community and liasion with local co-operative societies and rural associations, They also help farmers in land development and land
rehabilitation by providing credit facilities and technical advice.
In the development of fisheries, the department's work involves modernising fishing craft and introducing more efficient fishing gear and navigational aids. It also conducts experiments and demonstrations to test the suitability of new fishing gear. Training classes for fishermen are provided in the main fishing porte by the. department. Liasion offices are set up in the main fishing centres to maintain liagion with producer associations and fishermen's co-operative
societies.
Ang
Describe the work of the following:
(a) the Consumer Council;
the Independent Com Commission Against Corruption,
(a) The Consumer Council has consumer advice centres which offers pre-shopping advice
on goods and services or on the provisions of Laws that protect the interests of consumers¿ The centres also receive complaints.
The council conducts regular price aurveys and in-depth teate on various consumer goods to establish their performance, quality and value. This information is published in the council's monthly magazine choice.
The council also maintains contact with the
local mass media in educating the public on consumer matters and on their ríglita and responsilities as consumers.
(b)Independent Commission
Against Corruption (ICAC)
The Independent. Commission Against Corruption is responsible to investigate suspected corruption offences, prevent corruptich and promote higher social ethics.
The Commissioner is directly responsible to the Governor.
The commission ha9- three functional brancés: operations, corruption pre- vention and community. relations,
Under the Prevention of Bribery Ordinance, the Corrupt and Illegal Practices Ordinance and the ICAC Ordinance, the Operations Department investigates alleged or suspected offences.
The Corruption Prevent- ion Department examines the procedures and practices of government departments and public bodies and recommenda changes in work methods so as to reduce the possibility of corruption. It also gives advices to help people. eliminate corrupt practices,
The department secks in the long run to broades its scope of activity, and": refines ita mehtods of in indentifying corruption : opportunities and deviaing preventive measures.
The Community Relations Department is responsible to educate the public to fight against corruption. The long-term objective of the department is to foster greater civic awareness, faith in government and higher social ethics. The department is guided by the Citizens Advisory Committee on Community Relations. The Department's activities include public information and education campaigns through the mass media; and personal contact with the public, individually or in groups. A programme of liasion talks and visits were made with different sectors of the community.
END