Explain why economics is considered a "social science".
Scientific methodology to build knowledge (scientific) + deals with human behavior (social)
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15
Distinguish between Obama and Richard Burr’s views on the role of the government in managing the economy.
Obama = government spending to decrease unemployment, rejected the view that the government has no role; Burr says government spending money does not work!
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15
Explain why the concept of scarcity is linked to the concept of sustainability.
Threats to sustainability arises due to scarce resources; if we used up scarce resources in the present day, future generations are unable to meet their needs.
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15
Provide an example to illustrate how a good can be both considered a free and economic good under different circumstances.
E.g. seawater vs. water in a desert
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15
Explain the argument that the private sector is more efficient than the public sector in providing goods and services in an economy.
profit oriented = maximize profits & minimize costs + competition adds to more efficient allocation of resources
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banana
Go to last place!
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shark
Other team loses 20 points!
Okay!
gift
Win 20 points!
Okay!
thief
Give points!
5
10
15
20
25
heart
Other team wins 20 points!
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magnet
Take 10 points!
Okay!
gift
Win 25 points!
Okay!
lifesaver
Give 10 points!
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10
Using an example, explain the opportunity cost that a private company might face when it comes to its daily operations.
The opportunity cost of funding a new product may be to expand into a new geographical location, assuming it's the best choice forgone.
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boom
Lose 50 points!
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shark
Other team loses 10 points!
Okay!
gift
Win 15 points!
Okay!
banana
Go to last place!
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20
What is Pareto efficiency? How is it illustrated on the PPC?
A firm / economy that is operating on the curve is Pareto efficient - one cannot be better off without making another worse off.
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20
What are the three basic economic questions? Briefly elaborate.
What to produce, how to produce, for whom to produce.
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20
Due to COVID-19, the HK government issued consumption vouchers to the general public. Relate this decision back to THREE WiSE ChOICES concepts.
Intervention (e.g. intervene to stabilize economy), choice (helping the economy heres means giving up the choice to spend elsewhere), equity
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15
Briefly summarize Jean-Baptiste Say's views on economics.
supported the laissez faire approach and believed that ‘supply creates its own demand’
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15
What is the Marxist view on the value of goods? What is one potential criticism?
Labor theory of value; but value of good also affected by utility!
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20
Using a PPC, illustrate a scenario in which there is a constant opportunity cost between two goods (use actual goods)
