Evangel College
2011/2012 Term 1
Economics – Revision Exercise Final 10
Name:______________________________(
Elasticity
1.
2.
3.
D
A
C
4.
5.
6.
D
B
C
7.
8.
9.
C
A
A
)
10. B
11. D
12. C
Class:S.6 _______
13. D
14. C
15. D
16. C
17. A
18. C
19. C
20. C
21. B
HKCEE 2006CQ
Answer
Diagram:
- P, Qd (1)
- Correct position of 'Increase in total expenditure' &
'Decrease in total expenditure' (1)
- 'Increase in total expenditure' > 'Decrease in total
expenditure' (1)
Verbal elaboration:
- With an increase in import price in terms of HK$, the
quantity of imported cars decreased. (1)
- If demand is inelastic, (1)
- % change [increase] in P > % change [decrease] in Qd. (1)
HKCEE 2005CQ
Answer
Indicate on the diagram :
- Area abP1P2 = Gain ; Area bcQ1Q2 = Loss (1)
- Gain > Loss (1)
Verbal elaboration :
- inelastic demand for the tunnel service (1)
- P and Qd (1)
- percentage change in price > percentage change in quantity
demanded (2)
HKCEE 2004CQ
Answer
1
HKCEE 2003CQ
Answer
Indicate in the diagram:
- P  and Q  (1)
- revenue loss < revenue gain (2)
Verbal elaboration:
- elastic demand for HK exports (1)
- P  and Q  (1)
- % change in P < % change in Q (2)
HKCEE 2002CQ
Answer
Price
Indicate in the graph:
- selling price  and quantity demanded  (1)
- gain > loss (2)
Verbal explanation:
- selling price increases (due to the depreciation of the HK$ against the British Pound) (1)
Gain
- quantity demanded decreases (1)
% change in Q < % change in P (due to inelastic demand) (1)
- total revenue increases (1)
Loss
Quantity
HKCEE 2001CQ
Answer
Indicate in the graph:
- correct supply curve to show the original quota is effective (1)
- S1 shifts leftward to S2 (1)
- loss > gain (2)
Verbal explanation:
- S  (1)
- Q  after reduction of quota quantity, equilibrium price P  (1)
- condition : elastic demand (1)
- % change in Q > % change in P (2)
Price
G = Gain
L = Loss
Quantity
HKCEE 2000CQ
Answer
2
HKCEE 1998CQ
Answer
- price of Japanese cars (quoted in HK$)falls (1)
- an increase in the quantity demanded for Japanese cars (1)
- elastic demand means the % change in quantity demanded is larger than
the % change in price (2)
- sales revenue increases OR revenue loss
revenue gain (1)
HKCEE 1997CQ
Answer
- supply↓ (1)
- elastic demand (1)
- %  in price < %  in quantity demanded
or gain from P < loss from Q (3)
HKCEE 1996CQ
Answer
General manager :
- diagram (3)
- inelastic demand (1)
-% increase in quantity demanded < % decrease in price (2)
Sales manager :
- diagram (3)
- different newspapers are substitutes for each other /demand for this
newspaper would decrease (1)
quantity decreases (1)
HKCEE 1994CQ
Suppose a typhoon destroys a large quantity of vegetables of Country A. However, the total revenue from the
sale of vegetables increases. With the aid of a diagram, explain this phenomenon in terms of the price elasticity
of demand. (7 marks)
Answer
- diagram (3)
Verbal explanation
- demand is inelastic (1)
- %↑ in price > %↓in quantity sold
or revenue gain from price increase > revenue loss from
quantity decrease (3)
3
HKCEE 1993CQ
Answer
- the demand for hamburgers is elastic (∵there are substitutes) (2)
- %decrease in price < % increase in Qd (3)
or
- decrease in expenditure due to price fall < increase in
expenditure due to increase in quantity (3)
(3@, max : 3)
Diagram (2)
HKCEE 1992CQ
Answer
Diagram (4)
(I) price of a taxi licence will decrease (2)
(II) if demand is elastic, (2)
- % increase in Qd for taxi licences > % decrease in price
(2)
OR
-increase in value due to increase in number of licences
> decrease in value due to price fall (2)
(max : 4)
4