2009 會考經濟科 卷一 參考答案

CE Econ 2009 (Paper 1)

Section A

Question 1

(a) Definition of opportunity cost
the highest-valued option forgone [2]

(b) Whether the opportunity cost would be the same for Mary and Peter
No, because their time cost may be different [1+1]


Question 2

Type of business ownership
Public limited company [1]

TWO features [1@, max 2]
- independent legal status
- limited liability
- shares are freely transferrable
- lasting continuity
- required by law to disclose its financial information
- any other relevant point


Question 3

The law of diminishing marginal returns states that when variable factors are continuously added to a given quantity of fixed factors, the marginal product will eventually decrease. [3]

The data illustrate the law because as the variable factor, labour, increases from the 4th to the 5th unit, marginal product decreases from 22 to 21 units of output. [3]


Question 4

(a) Job A: Piece rate [1], Job B: Time rate [1]

(b)
Advantage of piece rate over time rate
lower monitoring cost / higher working incentive + explanation [2]

Disadvantage of piece rate over time rate
higher cost in calculating the wage payments + explanation [2]


Question 5

(a) Definition of inflation
a continuous rise in the general price level [2]

(b) Whether Phelps would gain or lose
He would gain [1] because
the purchasing power / real value of the repayment of his loan will decrease. [2]


Question 6

(a) Excess reserves = $300 － ($1 000 20%) = $100 [2]

(b) Maximum possible amount of deposits = $300 1/0.2 = $1 500 [3]


Question 7

(a) Per capita real GDP
Year 2000: $16 000 million 10 million = $ 1 600 [1]
Year 2008: ($24 840 million 100/115) 12 million = $ 1 800 [1]

(b) Why a change in per capita real GDP cannot accurately reflect the change in the general living standard [2@, max 4]

The increase in the general living standard will be overestimated if the income distribution is uneven, i.e. the increase in per capita real GDP largely goes to a small group of people.

The increase in the general living standard will be overestimated if the increase in per capita GDP is a result of an increase in military expenses or investment, i.e. the present consumption for the people in general remains more or less the same.

The increase in the increase in the general living standard will be overestimated if the increase in per capita GDP is accompanied by more serious pollution.


Question 8

(a) Component P of the current account is services

(b) The Q account is capital and financial account

(c) Visible trade balance = $130 billion; Re-export of goods is $2323 billion

Section B

Question 9

(a) Two economies of scale + explanation [2@, max 4]
- technical economies of scale
- financial economies of scale
- managerial economies of scale
- marketing economies of scale

(b) Condition for publishers’ total revenue to increase
Verbal explanation:
- Supply will decrease because of higher production cost. [1]
- The price will increase and the quantity will decrease [1]
- Inelastic demand [1]
- % increase in price > % decrease in quantity [2]

Indicate in the diagram:
- Supply curve shifts to the left [1]
- correct change in P & Q and gain & loss [1]
- Gain in revenue > loss in revenue [1]

(c) Why part of the spending on second-hand textbooks should be included in GDP
Part of the spending represents the value of services provided by the bookstores. Such services are current production and therefore should be included in the calculation of GDP. [2]

(d)
(i) Two other functions of money
Medium of exchange and unit of account [1+1]

(ii) Why book coupons cannot perform the two functions
Book coupons cannot perform the function of medium of exchange because book coupons are not generally accepted as a means of payment for goods and services [1]

Book coupons cannot perform the function of unit of account because the price of other goods are not expressed in terms of book coupons [1]


Question 10

(a) Two demand-side factors for the increase in GDP of Taiwan [2@, max 4]
- increase in consumption expenditure due to higher income of Taiwanese
- increase in investment expenditure, e.g. by firms (both Taiwan and Mainland) on business related to trading or on hotel accommodation
- increase in government expenditure related to those facilitating trade
- increase in net exports, e.g. due to increase in export of services (increase in the spending of tourists from Mainland China in Taiwan)

(b)
(i) Comparative advantage
The opportunity cost of producing one unit of computers in mainland China and in Taiwan are 1.8 (=90/50) units of toys and 1.25 (=250/200) units of toys respectively. [1+1]
Taiwan enjoys a comparative advantage in producing computers because it has a lower opportunity cost in producing computers. [1+1]

(ii) Gain from exporting one unit of computer to Taiwan
(1.5 − 1.25 − 0.2) units of toys = 0.05 units of toys [3]


Question 11

(a) Whether the profits tax revenue would necessarily decrease
No, because [1]
A reduction in profits tax rate would increase after-tax profits and increase investment incentive. The increase in profits tax revenue due to the increase in business investment and profits may be larger than the decrease in profits tax revenue due to a lower profits tax rate. [3]

(b) Rates as a direct tax or indirect tax
Indirect tax, [1] because
the tax burden of rates can be shifted to the others [1]

(c)(i)
Verbal explanation:
- The demand for red wine increases because it becomes more popular. [1]
- The supply of red wine increases because the duty imposed on it is waived. [1]
- The price of red wine will increase if the increase in demand is larger than the increase in supply [2]

Indicate in the diagram:
- Demand curve shifts to the right [1]
- Supply curve shifts to the right [1]
- Price increases [1]

(ii) Why there is a price difference [2@, max 4]
- different services, e.g. some shops may have more accessible location
- different production cost, e.g. the rental and staffing cost may be different
- imperfect information, i.e. consumers do not have costless information related to red wines