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Evangel College
2011/2012 Term 1
Economics – Revision Exercise Final 12
Name:______________________________(
)
Production in short run and long run
1. B
4. B
7. C
10. C
2. B
5. A
8. A
11. C
3. C
6. B
9. C
12. C
Class:S.6 _______
13. D
14. B
15. C
16. C
17. A
18. B
19. D
HKCEE 2006CQ
Answer:
- The law states that when variable factors are added continuously to the fixed factors, [holding technology
constant], the marginal product will eventually decrease. (3)
-
Diminishing marginal product of labour sets in when labour increases from 4 units to 5 units as the marginal
product falls from 60 to 30 units. (2)
The data illustrate the law of diminishing marginal returns. (1)
HKCEE 2003CQ
Answer:
- (a) The law states that as the variable factor is continuously added to the fixed factor, the marginal product
will eventually diminish. (3)
- (b)
-
It illustrates the law in (a) since MP eventually diminishes from 16 units of output to 10 units of output
when the 4th unit of machine is added to the production. (3)
HKCEE 2001CQ
Answer:
- (The data show that) machinery is a fixed factor and (1)
- when the variable factor, labour, is added successively to machinery, (1) the marginal product eventually
diminishes (2)
- the data illustrate the law of diminishing marginal returns. (1)
(2)
HKCEE 2000CQ
Answer:
- The law states that when variable factors are added continuously to the fixed factors, (holding technology
constant), the marginal product will eventually decrease. (3)
- The marginal product calculated is shown below: (3)
-
The data illustrate the law of diminishing marginal return.
HKCEE 1991CQ
Answer:
- Fixed cost:
- licence fee of the lorry/ monthly parking fee of the lorry/ registration fee of the firm/ any other correct
example is a fixed cost ∵ it does not vary with the output level. (3)
Variable cost:
- cost of petroleum/ depreciation of the lorry/ any other correct example is a variable cost ∵ it varies with the
output level. (3)
(An answer with wrong explanation will score no marks; wrong explanation but correct definition of fixed cost
and variable cost will score a max. of 2 marks)