Christian Alliance S C Chan Memorial College

2009-2010 1st Uniform Test

F.3 Economics

Name : ( ) F.3( ) Marks _____/70

Time allowed : 1 hour

Section A : Multiple Choice (25marks, 1 mark each). Choose the BEST answer.

1. Economics is the study of

A. how people make choices that best satisfy their wants.
B. how to become rich.
C. how to make use of all resources.
D. how to make better products.

2. Scarcity arises because

A. resources are fixed in supply.
B. resources are limited.
C. human wants are unlimited.
D. Both B and C

3. There is NO opportunity cost when there is

A. no money cost.
B. only one person.
C. no choice.
D. All of the above

4. Which of the following is INCORRECT?

A. Because of scarcity, we have to make choices.
B. Choices imply scarcity.
C. The wealthiest man in the world need not make choices.
D. If there are no options to choose from, there will be no cost.

5. Opportunity cost is not involved when

A. Kelly launches (推出) a Japanese CD instead of a Korean one.
B. The Twins learn music in their spare time.
C. Eason is sick and has to give up acting in a film.
D. Leon decides to host (主持) a TV show.

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6. Suppose Joey takes a two-week holiday after her concert. Her preferences about
how she can use the leave are as follows:

First choice: Taking a tour to South Africa

Second choice: Taking a short course about Korean
Third choice: Sleeping at home

What is Joey’s cost of choosing to sleep at home?

A. The tour to South Africa
B. The short course on Korean
C. The tour to South Africa or the short course about Korean
D. The tour to South Africa and the short course about Korean

7. Alice has three options after she graduates: being a policewoman, being a
saleslady, and continuing her studies. Her cost of being a policewoman is
A. being a saleslady.
B. continuing her studies.
C. being a saleslady or continuing her studies.
D. being a saleslady and continuing her studies.

8. Today is Fiona’s birthday. She can have dinner with her boyfriend tonight. If she
does not have dinner with him, she can work as a model for an advertisement for
$20,000. She can also perform in a show for $15,000. What is Fiona’s cost of
choosing to have dinner with her boyfriend tonight?
A. $35,000
B. $20,000
C. $15,000
D. $0

9. Leo plans either to go fishing at Sai Kung or to read a novel (小說) at home.
Which of the following will lower Leo’s cost of choosing to read a novel at home?
A. A red rainstorm warning signal (紅色暴雨警告訊號) is hoisted (懸掛).
B. The price of novels drops.
C. The novel is unexpectedly interesting.
D. Sai Kung is unexpectedly scenic (景色優美的).

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10. Below are the university programmes chosen by Alex for his university
application:

1st choice: Faculty of Law

2nd choice: Faculty of Economics
3rd choice: Faculty of Sociology

Suppose the starting salary for a law graduate (畢業生) is expected to increase.
Alex’s cost of choosing to study law will
A. increase.
B. decrease.
C. remain unchanged.
D. increase or decrease.

11. Cheung has a one-month vacation. The following is how he prefers to spend his
vacation:

(1) Travelling to Eastern Europe

(2) Searching for business opportunities in China
(3) Climbing Mount Everest
(4) Having an adventure in the Amazon forest

Mr Cheung’s cost of searching for business opportunities in China is giving up the

option of
A. travelling to Eastern Europe.
B. climbing Mount Everest.
C. having an adventure in the Amazon forest.
D. None of the above

12. During the summer holiday, Susan can earn either $7,000 as a lifeguard (救生員)
or $6,000 as a waitress. If she does not work, she will travel to Japan and the
expense of the trip will be $8,000. Her cost of travelling to Japan is
A. $13,000.
B. $8,000.
C. $14,000.
D. $15,000.

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13. Mrs Lee owns a fish stall at a market. Which of the following will decrease her
cost of running the fish stall?
A. Sales at the fish stall increase as the economy recovers.
B. Since consumers are afraid of ciguatoxin (雪卡毒), they have reduced their
consumption of coral reef fish (珊瑚魚), and this has led to a drop in sales.
C. Mrs Lee’s income from investing in stocks(股票) increases.
D. None of the above

14. Eddie can choose one of the following activities this Sunday:

1st choice: hiking (遠足)

2nd choice: playing TV games at home
3rd choice: studying

If Eddie’s TV game console breaks down, his cost of studying will __________
because __________.
A. decrease; he has fewer choices
B. increase; the value of hiking increases
C. remain unchanged; the highest-valued option forgone remains unchanged
D. remain unchanged; he will not choose to study

15. Study the following information below:

Square K Convenience Store

Each coupon can redeem one can of Coke or two packs of chewing gum.

#
This coupon can be used at any Square K store but cannot be exchanged for cash.

What is the cost of redeeming one can of Coke with the above coupon?
A. One pack of chewing gum
B. Two packs of chewing gum
C. An amount of cash equal to the market value of one can of Coke or two packs of
chewing gum
D. None of the above

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16. Faithful Department Store launches a gift redemption scheme to celebrate its 10th
anniversary: a customer who spends over $200 can receive a stamp and the number of
stamps required to redeem various types of gift are shown below:

Number of stamps required Gifts

10 A pack of chopsticks
50 A teapot
100 A wok

What is the cost of redeeming a teapot with 50 stamps?

A. A pack of chopsticks
B. 0.5 wok
C. 5 packs of chopsticks
D. None of the above

17. John has $10,000. His order of preference is as follows:

First priority: Lend the money to Mary and earn $1,000 interest per year.
Second priority: Deposit the money in a bank and earn $700 interest per year.
Third priority: Buy a new laptop which costs $10,000.

What is John’s cost of lending the money to Mary?

A. Buying a new laptop
B. Earning $700 interest annually by depositing money in the bank
C. Earning $700 interest annually by depositing money in the bank and the new
laptop
D. $10,000

18. Ming got a free gift with a coupon from a newspaper. Which of the following
statements is correct?
A. The gift is a free good.
B. The gift is an economic good.
C. The cost for the producers to promote by giving out free gifts is zero.
D. Ming’s cost of getting the gift is zero.

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19.
Used cans and paper boxes are
A. economic goods, because some people prefer more of them.
B. free goods, because they are discarded (被人棄置的).
C. All of the above
D. None of the above

20. The price of good X is zero. Good X can be

A. an economic good.
B. a free good.
C. either A or B
D. neither A nor B

21. A legislative councilor (立法會議員) provides free legal consultation (法律諮詢)

service for citizens. This service is
A. a free good, because it is free of charge.
B. an economic good, because citizens have already paid for it in terms of their votes.
C. a free good, because everyone is equal before the law.
D. an economic good, because citizens want more free legal consultation service.

22. In Hong Kong, when the Observatory issues the cold weather warning, the Home
Affairs Department will open temporary shelters for the needy. These temporary
shelters are _____________.
A. free goods, because the users do not have to pay
B. free goods, because they are open to everyone
C. economic goods, because they are well-equipped
D. economic goods, because costs are involved in providing them

23. Jolin buys a new necklace (項鍊) for $50,000 to wear on a TV show. The resale
value is $40,000. This implies that
(1) the necklace is a scarce good.
(2) the necklace is a free good.
(3) the necklace’s quantity desired is greater than its quantity available.
(4) the cost of keeping the necklace is $50,000.
A. (1) only
B. (2) only
C. (1) and (3) only
D. (1), (3) and (4) only

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24. Which of the following situations does NOT involve scarcity?
A. Victims of the Sichuan earthquake want more relief (救濟) from the rest of world.
B. There is plenty of snow on Mount Everest.
C. People queue up for free tickets to Yumiko’s concert.
D. Alex cannot get a copy of am 730 when he arrives at the MTR station after 9am.

25. Jay’s new album is a(n) _____________ good because _____________.

A. free; people can listen to his songs on the radio
B. free; people can download his songs from some websites
C. economic; people are willing to pay a price to get it
D. economic; people cannot listen to his songs without buying his album

Section B : Matching (5marks)

We have the followings resources in our school ‘SCC’. Classify items in Column I to
their respective type of resources in Column II. Write the correct letter in the spaces
provided.
Column I Column II
1. Ovens used in HE room A. Natural resources
2. Land site of SCC B. Human resources
3. Janitors C. Man-made resources
4. Flowers at school entrance
5. projectors and visualizers

Section C : Questions ( 40 marks)

1a) Define scarcity. (2 marks)
1b) ‘A good is not scarce if its supply is plentiful.’ Do you agree? (3 marks)

2. Ming is choosing pets. He can choose one of the following: a dog, a cat and a
snake. Suppose the prices of the three pets are the same. Ming’s preferences for
the pets are as follows:

1st choice: Cat

2nd choice: Snake
3rd choice: Dog

(a) Define opportunity cost. (2 marks)

(b) Explain why the cost of choosing the snake and the dog are the same. (3marks)

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(c) Suppose Ming later finds out that the cat is sick. Explain whether this will affect
his cost of choosing a snake. (4 marks)
(d) Ming’s uncle gave him a cat and a dog this summer vacation. ‘Ming does not have
to face scarcity any more as his wants for a cat and a dog are satisfied.’ Do you
agree? Explain. (4 marks)
(e) Ming will take him pet to visit the pet doctor. Give one example of natural
resource, man-made and human resource found in an ordinary pet clinic. (3marks)
(f) Ming paid $2,000 for a dog training course. After a few lessons, he discovered
that his dog behaved worse. Is the $2,000 included in the cost of continuing to
attend the training course? Explain. (4 marks)

3. Manus is a lawyer. He employs a secretary Nancy to type for him even he can
type as fast as Nancy. To Manus,what is the cost of typing by himself? What is the
cost of employing Nancy to type for him? Explain, in terms of cost, why he
employs Nancy to type for him. (5marks)

4. Disneyland and Ocean Park have already squared off in a battle to create the
Hallowed Eve attraction in town. In Ocean Park , visitors will have a chance to
take photos with their favourite cartoon characters free of charge.
(a) Explain whether the photo-taking services provided to the visitors is free
goods or not. (5 marks)
(b) Explain whether the opportunity cost of all visitors visiting Ocean Park
would definitely be the same or not. (5 marks)

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