《F409-10EX1MS_ans》.pdf

Form: 4 2009-2010 Subject: Economics First Term Examination Paper : I II Time Allowed: 2 hours ★ There are 9 pages in this paper, including this cover. ★ ★★ 《HKEAA APPROVED 》 calculators are allowed in this paper. ★★ Name: Class: Class No.: Date: 5-1-2010 Suggested Answers ECONOMICS PAPER I II 1 Section A. Multiple choice questions. Choose the BEST answer. (30 %) Section A. Answers 1. A 6. B 11. B 16. D 21. A 26. D 2. D 7. D 12. D 17. C 22. B 27. B 3. A 8. C 13. D 18. B 23. D 28. C 4. B 9. B 14. D 19. D 24. B 29. C 5. C 10. C 15. D 20. C 25. C 30. D Section B: Questions. Attempt ALL questions. (70 marks) 1. Mr. Chan is a doctor. He rents an office in Kwai Chung at $20,000 per month and employs Mary as his nurse at $8,000 per month. (a) Define opportunity cost (2 marks) Ans.: The highest valued option forgone OR the best alternative forgone. (b) Explain how Mr. Chan’s opportunity cost of running the clinic would change if i) Mary’s salary is increased to $9,000 per month. (3 marks) Ans.: Increased. The opportunity cost of running the clinic is the best alternative use of the money. The salary of Mary increa