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87-05 HONG KONG EXAMINATIONS AUTHORITY

ECON HONG KONG ADVANCED LEVEL EXAMINATION

PAPER I

A

ECONOMICS A-LEVEL PAPER I

Q.P. Code 6161

TOPIC : ELASTICITY

SECTION A – MULTIPLE-CHOICE QUESTIONS – Answer ALL Questions

(SECTIONS B & C questions are printed on a separate question/answer book.)

INSTRUCTIONS FOR SECTION A

1. Read carefully the instructions on the Answer Sheet and insert the information required in the spaces provided.

2. All the answers should be marked on the Answer Sheet.

3. Note that you may only mark ONE answer to each question. Two or more answers will score NO MARKS.

4. All answers carry equal marks. No marks will be deducted for wrong answers.

Prepared by : Lai Chun San Gary

8705-AL-ECON I-Elasticity-1

Section A

Answer ALL questions. There are 15 questions in this Section. Choose the BEST answer for each question.

1. If Mr A spends all his income on records no matter what the price is, then his demand for records is

A. inelastic.

B. perfectly inelastic.

C. unitarily elastic.

D. perfectly elastic. (1987_AL_MCI_07)

2. Goods X and Y are substitutes. A decrease in the price of X relative to the price of Y will lead to

A. an increase in demand for X but a decrease in demand for Y.

B. an increase in the total revenue of X but a decrease in the total revenue of Y.

C. a decrease in the total revenue of Y but the change in the total revenue for X is uncertain.

D. an increase in demand for X but the change in demand for Y is uncertain. (1991_AL_MCI_16)

3. Good X and Good Y are complements. At their prevailing prices, both of them have a price elasticity of demand greater than one. An increase in the price of Good X, ceteris paribus, will lead to a ______ in the total revenue of X and a ________ in the total revenue of Y.

A. fall, fall

B. rise, rise...