育教備章 頁三第張七第
1979
REFERENCE LIBRARY
23 JUN 1979
8/#A£#*212@WWIKIU YAT PO
price index
1977 $54,444 millions
100
中學會考試題預習專欄 地理科建議參考资料 明德出版社提供
GDP at market prices
198
real GNP in 1977
X
100 198
Section
(a) Capital means the
stock of goods which are used in production. It is a factor of production. For example, machinery is a capital.
(b) Opportunity cost is the value of the best alternative or opportunity that has to be forgone in order to achieve a particular thing. For example, a man going to watch movie will have to forgo the opportunity of watching television pro- grammes at the same time, and this is the opportunity cost of doing so. M
2. Short-run is a time period in which a firm ie unable to vary all its factors of pro- duction, while in the long run a firm can vary all its factors of production.
3. Balance of trade is the difference between a country's value of exports of goods and her value of imports of goods in a given year..
Balance of payments is the difference between a country'a receipts from other countries and her payments to other coun- tries. It is the sum of balance of trade, balance of invisible items, and balance capital movement.
4. A monopoly is a market in which there exist only one seller supplying the commodity in question. For example, the market for telephone services
price index
$54,444
$5,444,400
198
average growth rate
real GNP in 1977 -:
11,091
g.
12 × 100% 27496- 11.091
12.3%
11,091
11,091)
12 × 100%
(a) Income is a flow while wealth is a stock. Income is a payment to the use of any factor of production. Wealth ía an accumulation of income and expenditure.
(b) Substitube goods are of same use and nature, and can replace one another.
Complementary goods are goods which must be used together. An increase in the use of one will increase the use of the other(s),
Section B
(a) By limited liability 18 meant. that the liability of - a company is limited to the
jamount of capital fully paid up
by shareholders. It follows that every shareholder is lia- ble to the extent of the capi- tal he has contributed, but no
is considered to be a monopoly further than this. in Hong Kong.
5. (8) A A capital market is the market for medium-term and long-terms loans. It serves the needs of industry and Commerce
government and
institutions..
(b). - Stock
market shares and debentures are bought and sold. It helps
Mine of funds,
and collects small savings from the public for the needs of business firma, thus facili- tating their expansion of Bcale.
$40, Qd - 1,000
$50.
800
Elasticity of demand
-Qa
800-1000
1000 50-40
·40
200 1000
*10
40
$40, 48. $30, 082
1,000 900
Elasticity of supply
900-1000 1000 30-40
40
10
7 (a) National income is the total of all incomes earned as a result of the production of goods and services in a country during a period of time, usually a year.
(b) National Income could be increased by raising govern- ment expenditure and increa- sing the value of net exports jve. exports minus imports sold to other countries. (c)
P at market prices 811,091
1966
(b) A private limited company enjoys limited liability which is absent in sole proprietor- ship. It has two to thirty shareholders who all contribute capital, which is in total –
can have close contact with the
management of the company. Thus management responsibilities are spreaded among the share holders, while în sole proprie- torship all responsibilities rest with a single person,
Besides, managemeny skills and experience are pooled to- gether from shareholders in private linated company, which help the advancement of the company.
(c) The chief advantages of partnership are:
Wider experience 18 brought to the firn, especially when partners are of different profes- sional fields or of vari= ous potentials.
Business still remains private.
iii) The responsibility of
management no longer rest with a single person.
(a)
A large increase in the incoi -creas
cole
the market demand for television sets, As shown in the following figure, demand curve will shift to right from DD to D D.
• Price of the colour TV setš will o therefore rise and so does the quantity exchanged
ooo of consumers will in-
(b)
報日僑華
"As a result of technical advancement leading to a large fall in production cost of TV sets, its market supply will increase. As shown in the figure below, supply curve will shift from 55 to 5.S Price will therefore decreas
and quantity exchanged will increase.
e
As a tax is imposed on the sale of television sets, pro- ducers will have to charge higher price for every level of quantity sold. Thus market supply will in general decrea- se. As shown in the figure below, supply curve will shift from SS to S,S,. Price wil rise as a result of decrease in supply and quantity exchan- red will be reduced.
11. Before an entrepreneur decides whether his new textile mill will be built on Lamma Island or at Tsuen Wan, he has
consider the following
factors:
(8) Supply of labour force:
As textile industry is labour —intensive, the textile mill should better be located neer depsely populated area, where sufficient labour can lie avai- lable. In this
Wan is better than Lamma Island since the former has long been developed into a satellite town, accomodating nearly 500,000 citizens. HANNA, (6)
Supply of land for factory site:
The land value of factory site at Tsuen Wan ía higher than that on Lamma Island.. From this viewpoint, the latter can best suit the building of textile mill which also requires a large land area.
[((*)
Transportation-
As Tsuen Wan is nearer to Kwai Chung, a container termi- nal, the distribution of fini- shed goods and the transporta- tion of raw materials and machinery can be conducted at cheaper transportation cost than on Lamma Island..
(d) Power:
Tower is accessible in both areas.
Based on the pointa dicussed [above, the large textile mill is preferably to be built at Teuen Wan.
12
Economies in production can be created within a firm when output increases. It seems certain that in all firms, average cost falls to some extent over low ranges of output as output rises.
A large firm can have. a better chance to enjoy the following types of economies:
(a) Economics in the use of
factors of production
六期星
日三廿月六年九七九一层公年八十六国民華中
To produce a large out- put, a firm has to use more. quantities of labour force. Greater division of labour will probably be introduced. A large firm can be able to employ fully qualified specí– alists, and more specialised machinery which are very lar- ge in size and indivisible. Large scale production can make a more economical use of its materials, for what might be wastes to a small firm can often be used in the manufacture of by-products in a large firm,
(b) Economies in administre-
tion
The increase in product- ion necesaitates a greater division of labour and spe- cialisation. The managers and supervisers in a large firm may be able to devote themselves to administràt- ion.
(c) Marketing economies
A large firm can genera- ly buy more cheaply than a small one, for it can buy its raw materials in bulk, and so obtain it a lower price, Similarly a large retailing firm can buy direct from a producer at a lower price.
(d) Economies in finance:
Generally large firms.” can borrow money from banks at a lower rate of interest since they are considered to be the safer borrowers.
(e) Economies in research
A large firm can afford. to have its own labouatories
and employ a large number of researchers.
(f) Economie:
13
of velfa vided ta firms.
individuaj. de
provision
targe
Direct taxes are levied on the incomes or welath of
and firms, Their incidence varies from one tax- payer to another according to their financial circumst- ances. The payment of them is a direct transection be- tween the taxpayers and the government.
Indirect taxes are levied on specific goods or services, and must be paid by the producer or consumer of these goods and services irrespective of his financial
circumstances. A An indirect
tax is usually handed over to the government by the pro- ducer or the distributor, but the burden of the tax is frequently shifted partly or wholly on to the consumer in the form of an addition to the price.
Local examples:. Direct taxes: profits tax,
salaries tax. Indirect taxes: rates,
entertainment
tax.
(b) A budet deficit of a government in intened to stimulate the economy by increasing government expen- diture. This will increa«ė the supply of money in the economy and therefore encou- rage the consumption and in- vestment: demand in the econo-
my. Firms will increases
production and there will be more job opportunities pro- vided. In short, the govern- ment wants to exert an expan- sionary effect on the economy through a budget deficit.
A budget surplus has a mild expansionary effect on the economy if the surplus is small in amount, or a contrectionary effect on the economy if the surplus is large in amount. Thus if the government adopte budget. surplus, it intends to reduce
aggregate demand in the eco- nomy National output will fall as a consequence.
14.
(a)
Arise in the cost of living means that the expense that bas to be spent in order to maintain a satisfactory level of living has been raised to a higher level. other words, more
money has to be spent than before in order to maintain the same level of living.
A rise in the standard of living means that the well-being of the people has been improved and raised to
higher standard. This implies that there are more goods and services of higher quality to be enjoyed.
(b) A country can have both a rise in the cost of living and a rise in the standard of living. This is because the country has experienced economic progress that results in the increase of people's income, thus enabling them
to
enjoy more goods and ser- vices of better c quality.
But at the same time there may be a rise in the level of general prices, thus increasing the codt of buying goods and services, especially those of necessi- ties. A rise in the cost of living is the result.. Thus it is possible for ~ a country to have a rise in the cost of living on the one hand, and a rise in the standard of living on the other hand, mainly because it has economic progress and inflation simultaneously.
15. Although Hong Kong 18 capable of manufacturing washing machines, it 18.
still advantageous for Bong hong to import them.
This can be explained by The Theory of Comparative Advan- tage.
The theory states that international trade will be beneficial to two countries, if they have different compa- rative advantages in produc- ing two different goods, As a result of specialisation and trade, both countries can consume more of two goods and the world as a whole can încrease the production of the two goods. Even if a country is self-sufficient, it still can gain from trade if it specialises in the production of goods in which it has comparative advantages and use them to exchange for other goods from other coun- tries, in which it has COM parative disadvantages.
As Hong Kong can prod- uce washing machines with its available machines and skilled labour, it still have to import them because Hong Kong has comparative disadvantage in the product- ion of it. Hong Kong has comparative advantages in the production of other goods. Thus it is advisable for Hong Kong to specialise in producing other g goods in which it has comparative. advantages, and import washing machines from other countries, in which it has comparative disadvantages.
The theory ensures that competition in the world can be conducted thro- ugh international trade. Innovations and improvements of products can be encourag- ed. There will be advanced technology and higher effi- ciency in production. All these help improve the stan- dard of living in Hong Kong and also in the rest of the worldy
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