Download 2013 HKDSE Economics Seminar on Live Paper

Public Assessment
HKDSE Econ 2013 live paper
Oct 2013
1
Live papers
Paper 1:
 On compulsory part of the curriculum
 Answer all questions
 40 multiple choice questions*
 Account for 30% of the subject marks
(without SBA)
 60 minutes
 *In 2014, total number of MCQ = 45
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2
Live papers
Paper 2 section A:
 On compulsory part of the curriculum
 Short questions
 All questions are compulsory
 8 short questions
 50 marks
 Account for 30% of the subject marks
(without SBA)
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Live papers
Paper 2 section B:
 On compulsory part of the curriculum
 Structured/essay-type questions
 All questions are compulsory
 4 structured questions
 54 marks
 Account for 31% of the subject marks
(without SBA)
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Live papers
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Paper 2 section C:
On elective part of the curriculum
Structured/essay-type questions
Attempt questions on ONE elective only
2 structured questions
16 marks each
Account for 9% of the subject marks
(without SBA)
In 2014 Exam: Total time is 2 hours 15 mins
Paper 1
Number of sat: 21334
 Overall mean score:
25 out of 40 question
= 62.5%
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*compare to last year, the mean is
dropped by less than one question.
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Paper 1 Q12
A drop in the price for good X will lead to a drop in the price of
good Y if
(1)
good X and good Y are substitutes.
(2)
good X and good Y are complements.
(3)
good X and good Y are in competitive supply.
(4)
good X and good Y are in joint supply.
A.
B.
C.
D.
(1) and (3) only
(1) and (4) only
(2) and (3) only
(2) and (4) only
7
(24%)
(15%)
(10%)
(51%)
Paper 1 Q17
The market structure of the electric power industry in Hong Kong is
A.
an oligopoly because there are two dominating companies in
the market.
(37%)
B.
an oligopoly because the pricing strategies of the companies
are interdependent.
(7%)
C.
a monopoly because the companies can increase the price
without losing customers.
(16%)
*D.
a monopoly because there is only one electric company
providing electricity in any district.
(40%)
8
Paper 1 Q21
Which of the following items is NOT included in the calculation of
Hong Kong’s net factor income from abroad for the current year?
A.
the income received by a Japanese teacher who worked
in a language school in Hong Kong for one year (22%)
B.
rental income earned from real estate holdings in
Canada owned by a Hong Kong resident
(13%)
C.
salary received by an Indian consultant who worked for
the Hong Kong Airport Authority for three months(28%)
D.
dividends earned from shares in Hong Kong held by a US
resident
(37%)
9
Paper 1 Q25
Which of the following is included in the money supply M2?
(1)
(2)
(3)
(4)
legal tender held by licensed banks
demand deposits with licensed banks
time deposits with restricted licence banks
negotiable certificates of deposit issued by licensed banks
held by the non-bank public
A.
B.
C.
D.
10
(2) and (3) only
(2) and (4) only
(1), (2) and (4) only
(1), (3) and (4) only
(10%)
(41%)
(43%)
(6%)
Paper 1 Q28
An expansionary monetary policy is adopted in China when
(1) the Ministry of Finance (財政部) provides cash subsidies to
agricultural workers.
(2) the People’s Bank of China (中國人民銀行) reduces the required
reserve ratio of all commercial banks.
(3) the Bank of China lowers its lending rate to small and mediumsized enterprises.
A.
B.
C.
D.
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(1) only
(2) only
(3) only
(1), (2) and (3)
(9%)
(43%)
(6%)
(42%)
Paper 1 Comments
Time: 40 MCQs in 60 mins
 Sufficient time
 Candidates are weaker in
- Data interpretation
- Application formula for calculation
- Integration of topics
- Marcoeconomics
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Paper 2
Number of sat: 21309
 Overall mean score in 2013: 50%

13
Paper 2 Marking
Onscreen Marking System (OSM)
 Scanned images
 Markers mark in Assessment Centres:
 FH, SPK, LK, TW, TH, ST, SS, TKO
 Section A1, A2, B1, B2, C
 Each Marker marking 16-27 marks
 800 to 1000 script
 Increase reliability
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Paper 2
Welcome the Assistant Examiners to
comment on the candidates
performance by Section:
 Section A1: (Q1, 3, 4, 6)
 Section A2: (Q2, 5, 7, 8)
 Section B1: (Q9-10)
 Section B2: (Q11-12)
 Section C: (Q13-14)
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15
Paper 2 Section A1 (Q1, 3, 4, 6)
Q1: In Hong Kong, there are many travel agencies providing tour
groups and booking services for air tickets. Give TWO reasons to
explain why the market structure of travel agencies in Hong Kong is
NOT perfect competition.
(4 marks)
Q3: (a) What is the relationship between nominal interest rate and
real interest rate?
(2 marks)
(b) “When there is actual deflation, the nominal interest rate will be
lower than the real interest rate.” Do you agree? Explain. (3 marks)
16
Paper 2 Section A1 (Q1, 3, 4, 6)
Q4: (a) Give ONE reason to explain why the aggregate demand
curve is downward sloping.
(3 marks)
(b) Suppose there is an increase in the price of raw materials. With
reference to the market adjustment mechanism from the short run
equilibrium to the long run equilibrium, explain the long run effect of
the above change on the price level with the aid of Figure 1.
(9 marks)
17
Paper 2 Section A1 (Q1, 3, 4, 6)
18
Paper 2 Section A1 (Q1, 3, 4, 6)
Q6: The table below shows the items of the balance of payments of
Country A in a certain year:
Debit ($ million)
Export of goods
Import of goods
Export of services
Import of services
Capital inflow
Capital outflow
Foreign exchange and
reserves assets
Total
19
Credit ($ million)
35
50
47
27
70
85
10
162
162
Paper 2 Section A1 (Q1, 3, 4, 6)
Q6: (a) Calculate the current account balance of Country A.
(1 mark)
(b)“Country A has a balance of payments surplus because there is
an increase in foreign exchange reserves in that year.” Explain
whether you agree with this statement.
(3 marks)
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Paper 2 Section A2 (Q2, 5, 7, 8)
Q2: The Hong Kong government plans to introduce the “Hong Kong
Property for Hong Kong Residents” policy. The flats built under the policy
can only be sold to Hong Kong permanent residents within 30 years.
(a) What are private property rights? Explain why the private property rights
over the flats may be weakened under this policy.
(4 marks)
(b) Compared with similar flats in the same district without the reselling
restriction, would the price of the flats under this policy be higher or lower?
Explain.
(3 marks)
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Paper 2 Section A2 (Q2, 5, 7, 8)
Q5: Each unit of resources can be used to produce the following amount of
goods in Country A and Country B:
Food (units)
Country
A
Country
B
Smartphones (units)
30
OR
40
40
OR
80
(a) Explain which country has a comparative advantage in the production
of smartphones.
(3 marks)
(b) Suppose the transportation cost per unit of smartphones traded is 0.2
units of food. Is it possible to have mutually beneficial trade between these
two countries? Explain.
(3 marks)
22
Paper 2 Section A2 (Q2, 5, 7, 8)
Q7: Table 1 shows the Gini coefficients by occupation of Hong Kong in the
years 2006 and 2011.
Table 1
Gini Coefficient
2006
2011
Construction
0.362
0.385
Financing, insurance, real
estate and business
0.544
0.548
services
(a) According to Table 1, which occupation has a smaller income inequality
among its workers? Give TWO possible reasons that account for such a
difference in income inequality.
(4 marks)
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Paper 2 Section A2 (Q2, 5, 7, 8)
Table 2 shows the employment distribution by industry section of Hong Kong
in the years 2006 and 2011.
Table 2
Employment Distribution by Industry
Section
2006
2011
Construction
8.0%
7.7%
Financing, insurance, real
estate and business
17.0%
19.2%
services
Table 3 shows the Gini coefficients of Hong Kong in the years 2006 and
2011.
Table 3
2006
2011
Gini Coefficient
0.533
0.537
(b) How may the data given in Tables 1 and 2 help explain the change in the
income inequality of Hong Kong as reflected in Table 3?
(4 marks)
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Paper 2 Section A2 (Q2, 5, 7, 8)
Q8: Suppose a government is facing a budget deficit. Some politicians have
proposed that the government should raise the income tax rate to reduce
the budget deficit. Evaluate their proposal. (4 marks)
25
Paper 2 Section B1 (Q9-10)
Q9: The following is an extract from a local newspaper article.
The MTR Corporation raised the railway fares by 5.4% in 2012. This
increase was based on the Fare Adjustment Mechanism set by the
government. To respond to the discontent of the public over the fare
increase, the Corporation introduced a concessionary measure “Ride
10 Get 1 Free”.
(a) With the aid of a diagram, explain under what condition the total
expenditure of passengers on the MTR will increase because of the rise in
fare.
(5 marks)
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Paper 2 Section B1 (Q9-10)
Q9: (b) Under the “Ride 10 Get 1 Free” scheme, with 10 fare-paying
journeys on the MTR from Monday to Friday in the same week,
passengers could get a single journey ticket for free. Is the free journey a
free good? Explain.
(2 marks)
(c) It was observed that there were queues of passengers redeeming the
free tickets at customer service counters in MTR stations. Suppose the
waiting time is the same for these passengers, is the cost of redeeming
the free tickets necessarily the same to these passengers? Explain.
(3 marks)
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Paper 2 Section B1 (Q9-10)
Q10: There are cooks, waiters, managers and receptionists working in
restaurants.
(a) What economic principle is illustrated by the above phenomenon? List
THREE reasons why the principle can increase labour productivity.(4 marks)
The following is a job advertisement for a manager in a restaurant.
Manager
Working hours: 12:00 noon – 10:00 p.m.
6 days a week
Salary: $15 000 per month + performance-related bonus
(i) From the viewpoint of the restaurant owner, explain ONE
advantage of the above payment method over time rate.(2 marks)
(ii) From the viewpoint of the manager, explain ONE advantage of the
above payment method over a profit-sharing scheme. (2 marks)
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Paper 2 Section B1 (Q9-10)
Q10(c) The Hong Kong government has introduced an effective minimum
wage. Subsequently, many restaurant owners claim that they are unable to
employ enough workers for their restaurants at the minimum wage rate.
With the aid of a demand-supply diagram, explain why the above
phenomenon may arise.
(9 marks)
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Paper 2 Section B2 (Q11-12)
Q11: The government has launched the “Work Incentive Transport Subsidy
Scheme”, with the following objectives:
(1) To relieve the burden of travelling expenses commuting to and from work
on the part of low-income households with employed members
(2) To promote sustained employment
Applicants must meet the monthly income and asset limits of the household
(e.g. for a single person, the monthly income cannot exceed $7 300 and the
assets cannot exceed $72 000) and work no less than 72 hours per month in
order to apply for a subsidy of $600 per month.
(a) Do you think that the scheme can achieve the above two objectives?
Explain.
(4 marks)
(b) Discuss the effects of the scheme on (i)labour mobility,
(ii) income inequality, and (iii)the unemployment rate. (9 marks)
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Paper 2 Section B2 (Q11-12)
Q12: The following table shows the balance sheet of the banking system of
an economy.
Assets ($million)
Liabilities ($million)
Reserves 400
Deposits 2 000
Loans
1 600
The public holds $1 000 million cash and all banks are fully loaned up.
(a) Calculate the monetary base and the money supply in the economy.
Show your workings.
(4 marks)
(b) If the required reserve ratio is adjusted to 25%, calculate the new
money supply in the economy. Show your workings.
(2 marks)
(c) With the aid of an aggregate-demand-aggregate-supply diagram,
explain the short run effects of an upward adjustment of the required
reserve ratio on output and the price level of the economy.
(8 marks)
31
Paper 2 Section C (Q13-14)
Q13: (a) Figure 2 shows the demand curve faced by a monopolist. The
monopolist has a constant average cost of production. With the aid of
Figure 2, explain why simple monopoly pricing may lead to economic
inefficiency.
(7 marks)
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Paper 2 Section C (Q13-14)
Q13: (b) A retailer offers discounts to tourists who are able to present their
travel documents at the cashier. Does this practice constitute price
discrimination? Explain.
(3 marks)
(c) Name the anti-competitive behaviour that each of the following cases
may constitute and explain how such behaviour restrains competition.
(4 marks)
(i) An instant noodle supplier does not supply its product to a local retailer
because the retailer refuses to comply with the recommended price set by
the supplier.
(ii) One of the major bus companies reduces its fares to a level below its
cost of production.
(d) Explain ONE concern when introducing a competition policy.(2 marks)
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Paper 2 Section C (Q13-14)
Q14: (a) Country A requires 1 unit of labour to produce a unit of Good X and
2.5 units of labour to produce a unit of Good Y. Suppose labour is the only
resource required for production. Country A is endowed with 10 units of
labour and the terms of trade is 1X = 1Y.
(i) Explain which good Country A will import.
(ii) Construct the production possibilities frontier and consumption
possibilities frontier of Country A in Figure 3.
(4 marks)
Suppose the labour force of Country A increases by 10 units.
(iii) Will the direction of trade be affected? Will Country A be better off as a
result? Explain your answers with the aid of Figure 3.
(6 marks)
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Paper 2 Section C (Q13-14)
35
Paper 2 Section C (Q13-14)
Q14: (b) Refer to the following information about Hong Kong and Japan in
2011 and answer the following questions.
Japan
Hong Kong
Human Development
Index (HDI) rank
12
13
Gross National Income per
capita rank MINUS HDI rank
11
-4
(i) Which place had a higher Gross National Income per capita in 2011?
Show your workings.
(ii) State TWO possible reasons why Japan had a higher HDI rank than
Hong Kong in 2011.
(iii) Suggest ONE government policy that could raise Hong Kong’s HDI
rank.
(6 marks)
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Paper 2
General reminder:
 Please don’t use colour to indicate the
areas in the diagram
 Don’t successively use symbols in the
answer.
 Express the answer in a
comprehensible way: rough work write
not in the designated spaces will NOT
be marked.
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Paper 2 Overall comments
Time allocation
 Simply regurgitating concepts and theories (but not precise enough)
 Read questions carelessly
 Poor presentation
 Graphs and handwriting
 Lack awareness of current economic
issues
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Grading - paper marks and
subject marks
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Raw mark of Paper 1 (max mark): 40
Raw mark of Paper 2 (max mark): 124
Adjusted mark: Marks awarded by markers
are adjusted, if necessary, to rectify lenient,
strict or erratic marking.
Weighted paper mark: Marks of different
papers are converted to the same
comparable scale, taking into account the
spread of marks in different papers and the
published paper weightings, before they are
combined to form the subject mark.
Grading - Grading
procedures
http://www.hkeaa.edu.hk/tc/hkdse/The_Report
ing_System/
1. Sample scripts selection
2. Standardisation
3. Post-marking exercise:
The grading panel will discuss and
suggest a provisional grading
recommendation (including prepliminary
cut score range) on each paper through
expert judgment base on:
40
Grading – Post-marking
exercise
The level descriptors
The standards of 2012 DSE (library scripts)
Marked-live scripts, selected according to the total
marks
Feedback from markers on the level of difficulty of
papers
Inter-paper correlations, the mean and standard
deviation of the current year’s papers
Paper mark cumulative distributions
Performance samples from the HKDSE SRR
information Packages
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Grading – Panel of judges
grading meeting
•
•
•
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prepliminary cut score range
Samples scripts around the cut score range
Group ability index:
- constructed per level
- An index for each level based on the
number of candidates in this group (this
subject) achieving that particular level in
the four core subjects
- depends on the correlation of the subject
and EACH of the 4 core subjects
Grading – Panel of judges
grading meeting
Panel of judges considers:
• preliminary cut score range
• Samples scripts around the cut score range
• Group ability index (GAI) as reference
 Recommendation for the cut score for the
subject
•
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The panel of judges plays a very important
and independent role in setting a cut score
for each level based on the actual
performance of candidates
Grading – Internal meeting and
Public Examinations Board meeting
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•
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Internal meeting: A senior management team led by Secretary General of the Authority will meet to review the recommendations of individual subject panels.
PEB meeting: The recommendations of the
internal meeting will be reviewed at the PEB
meeting and the final cut scores of all
HKDSE subjects must be endorsed at this
meeting.
Grading – Determination of
level 5** and 5*
•
•
•
45
Statistically determined
The highest 10% (approximately) of level 5
candidates will be awarded 5**
The next highest-achieving 30%
(approximately) of level 5 candidates will be
awarded 5*
Grading: Standard Maintenance •
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Standard of the level 1,2,3,4,5 should be
maintained across years
the cutting scores NOT constant:
the cutting scores depends on level of
difficulty of the papers and the actual
performance of the candidates
It is possible that a level 2 candidate
perform better in one particular question
than a level 5 candidate:
the level represents the overall performance
Acknowledgment Mr. Chan Mau Tak
 Mr. William Au
 Mr. Ng Man Ho
 Ms. Amy Chan
 Mr. Chan Chi Yuen
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Po Chiu Catholic Secondary School
Acknowledgment 
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Ms. Man Kam Fun
Ms. Lau Yin Ling
Mr. Chan Wai Kit
Ms. Wong Chor Yu
Ms. Tseng Lai On
Ms. Piano Lo
Mr. Wong Wing Chung
Mr. Pang Ying Yeung
Ms. Joanna Pun
Heung To Middle School