2009 高考經濟學 卷一 B & C 參考答案

Section B

The answers provided hereunder offer only the correct approach to the questions, rather than the points that should be included in the examination for scoring marks. Readers should not simply evaluate their scores in the live examination on this basis (Readers in general may not know why it is so, although my students would definitely understand what I mean.)


Question 1

Economics explain behaviour by deriving testable implications from postulates, which restrains human behaviour. The law of demand restrains behaviour in the way that the quantity demanded for a good depends negatively on the price of that good. Without such restraints on human behaviour, no testable implications can be derived. (Students may discuss a little the relationship between the law of demand and the postulate of constrained maximization.)

The demand curve derived from the indifference curve analysis can be downward or upward sloping, given the Giffen good possibility. The law of demand is therefore itself an assertion, requiring no support by the indifference curve analysis.


Question 2

The law of diminishing returns states that as variable factors are continuously added to a given quantity of fixed factor, marginal product will eventually diminish. With a downward sloping marginal product curve of labour (which can be translated into the demand curve for labour), wages and rents can be determined given the upward sloping labour supply curve. Without this law, adding fertilizers to a tiny piece of land would be able to grow enough food to feed the whole world, and in this case land rents (or land price) and wages cannot be determined.


Question 3

A public good is a good that can be consumed concurrently by many individuals. Performance by a pianist and television programmes are examples of public goods privately produced. Private producers can survive if the cost of excluding free-riders is lower than what they can receive from the buyers of the goods. In the context of the above examples, admission fees can be charged for the performance in a concert hall and subscriptions fees for cable TV are routinely charged with a sufficiently low cost of enforcing against free-riders.


Question 4

For a scarce resource with no alternative use, the cost of using the resource would be what the user can obtain from an outright transfer of the resource (or renting the resource to the others). In the late George Stigler’s example of airport built on a small island in the Pacific, there is no other valuable use than airplane refueling. If the owner of that airport chooses to operate it on its own, his cost will be the price he can receive from the outright transfer (or the rent from operating the airport). A cost is implied when there is choice. Operating the airport or renting it out is itself a choice, let alone the choices of different ways of operating the airport, for example, the runways used for airplane landing and taking off.


Question 5

Wealth is income discounted (W=Y/r). Multiplying wealth by the market rate of interest yields (annuity) income, which is the potential consumption that can be made without trenching wealth. In a one-man economy there is no market of any kind, and therefore wealth cannot be determined without the market rate of interest used for discounting, although income exists in a one-man economy.



Section C

Question 6

(a) Adopting piece-rate contracts may render minimum wage laws ineffective because wage rate are measured by piece count instead of the length of working time. The complications are that if the incomes, expressed in terms of hours, of some piece-rate workers with exceptionally low productivities are lower than minimum wage, it may be regarded as a contravention of the law. If such situation results in an abolition of the piece-rate contracts by legislation (as in some western countries), piece-rate contracts would not render the minimum wage laws ineffective. Of course, if production orders are simply sub-contracted with a price set for each unit of the output produced (also a piece-rate contract) to workers who simply work at home, no employer-employee relationship is present and the laws do not apply.

(b) Huge transaction costs are involved in determining the shares of each worker, resolving disputes, and monitoring against underreports of the actual sales.

(c) They are not unemployed if they turn to be self-employed, which may takes various forms like hawking and begging, or if they simply take leisure and do not search for a job.


Question 7

(a) The out-of-state hunters would be better hunters (i.e. hunting more animals) with higher productivity of hunting, as reflected in their higher cost of hunting (e.g. higher licence fee and transportation cost). Given a higher lump-sum cost to be incurred, the average cost of hunting will be lower with more animals hunted and the out-of-state hunters would tend to put more effort to hunt more as well.

(b) More wildlife would be hunted because the licences would more likely be used by better hunters, and the average number of use for each licence would also increase.

Assuming the licence issuing department is maximizing wealth (as it is the case because in the US the licence issuing departments earn commissions from issuing licence), the total licence fees collected would decrease. Transferable licence implies a decrease in the total number of licence issued and an increase in the licence fee for each licence. There exists a combination of price and quantity of licence that makes the total licence fee identical in the two cases. Yet the cost involved in transferring the licence would have to be deducted from the licence fee that could be charged by the licence issuing department under transferable licence, implying a decrease in total licence fee. (Students need not feel disappointed if they could not get this part of the answer because it involves really sophisticated analysis. Alternative answers would be accepted as long as they are well reasoned with appropriate assumptions.)

(c) Preserving wild salmon generates benefits to special interest groups such as the holders of restrictive fishing licences. An increase in the supply of salmon due to private raising of it would reduce the market value of the fishing licences, and hurt the interest of the above interest groups. (Students may tend to think those who fought to preserve wild salmon are environmental protection groups. However, scientifically we cannot distinguish who are truly “environmental protectionists”.)


Question 8

(a) If flights with different flying time (and different vacancy rates) are charged different prices, and the pricing arrangements are open to all passengers (i.e. passengers choose their own flights among those flights with different flying time and prices), there is no price discrimination. If for the same flight with the same flying time (and identical vacancy rate) different discounts are offered to different passengers, it is price discrimination. In the presence of information cost (for both passengers and the airlines) this discounting practice for economy-class tickets would increase the average price received by the airlines, as the ticket prices of flights with better flying time (a higher market demand) will have a higher price when the passengers choose their own flights, while the flights with inferior flying time (a lower market demand) would be fully filled up by offering varying discounts (the marginal cost of serving an additional passenger will be zero when there is vacancy).

(b) Of course higher total revenue. A high uniform price may result in a high vacancy rate while a low uniform price would result in loss in revenue from charging higher prices for some passengers with higher information cost. The discounting practice allows a higher price charged on passengers with higher information cost while generates extra revenue from fully filling up the vacant seats by offering different discounts.

(c) If the first-class tickets offer discounts, some economy-class passengers may switch to buy first-class tickets, resulting in an increase in vacancy for the economy-class seats. The existing discounts for economy-class tickets could not be sustained without a downward adjustment of the discounts. Given that the existing price differential between first-class and economy-class tickets reflects the difference in seat quality and that the seats are already fully occupied under the current discounts adopted for economy-class, a reduction in the prices of the first-class tickets (and therefore the prices of economy-class tickets) would necessarily result in lower revenue.