Senior Secondary (HKDSE) · Economics

Economics as a social science: Practice Questions

3 multiple-choice questions marked as you go, and 4 written questions with worked solutions. All on Economics as a social science.

7 questions22 marksFree, no account

Question 1

1 mark

Economics is a social science that studies human behavior. It specifically investigates how individuals and societies decide on the use of ____________ resources by referring to the postulate of ____________.

Question 2

1 mark

A tech consultant spends HK\$1,200,000 of his own money to buy hardware for his firm instead of receiving 3% annual interest at the bank. He also hires a secretary for HK\$22,000 per month. What are his monthly explicit and implicit costs?

Question 3

1 mark

Economics is regarded as a social science because it analyzes human behavior. Which of the following best illustrates the application of the postulate of constrained maximization to a specific behavior?

Question 4

2 marks

In economics, we study human behaviour regarding the use of scarce resources. By referring to which postulate do economists explain the choices made by individuals and societies?

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Question 5

4 marks

Explain how the concept of 'constrained maximization' applies when a local government uses its limited tax revenue to simultaneously pursue the goals of improving public transport infrastructure and reducing pollution levels.

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Question 6

5 marks

Evaluate the following statement: 'If the market price of a good is zero, there is no scarcity, and therefore the postulate of constrained maximization cannot be applied to analyze consumer behavior.' Discuss with reference to economic goods and the constraint of time.

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Question 7

8 marks

In a society with limited resources, the fundamental problem of scarcity necessitates various economic processes.

(a) "As long as scarcity exists, competition is inevitable, and competition implies discrimination." Explain the logical relationship between these three concepts. (3 points)

(b) A government decides to allocate public housing units based on a random lottery system. Identify the criterion used for allocation and explain how this system still involves "discrimination" despite being random. (2 points)

(c) Consider the following two statements regarding interest rates:
Statement 1: "The current market interest rate of $ 4\% $ is too high and should be lowered by the central bank to help low-income families."
Statement 2: "An increase in the interest rate raises the opportunity cost of present consumption, leading to a potential increase in savings."
Distinguish between positive and normative statements using the examples above. (3 points)

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