會考經濟(20/04/2007) SonofEco 問

SonofEco 問:RMb vs hk dollarYear
Exchange rate1984 HK339=RMB100
1985 hk266=RMB100
(1)In terms of hk dollars what was the effect of the above change in the exchange rate on the 1985prices of books in China?(2marks)

(2)Mr chang spent more hk dollars to buy book in china in 1985 than in 1984 .Using concept of price elasticity of demand and your answer in (1),explain this phenomenon with the aid of a diagram.(8marks)how to draw this diagram ??Is it since the hk dollar appreicate against RMB,the price of book in china in terms of hk dollar increase fromP1 to P2, the quantity demanded for these books decrease fromQ1 to Q2.As the demand for China books is inelastic,the percentage increase in price is greater percentage decrease in quantity demanded,so the total expenditure increase?Am i correct??

SonofEco,

呢條係好典型嘅 Exchange rates & Ed + area (率,需求價格彈性+面積)題目, see 98-B11(b)(8M), 02-B12(a)(ii)(7M), 06-B10(a)(ii)(6M)

Remarks:
1. 首先判斷邊隻貨幣appreciate(升值)/depreciate(貶值)
2. 答price嘅時候,要小心係in terms of domestic currency/foreign currency(以本地貨幣/外幣計算)
3.如果題目涉及出入口,咁就要留心題目係問export/import(出口/入口)嘅price(價格),volume(數量),or value(總值)
4.見到呢條題目俾咗total expenditure(總支出), 即係考area (price x quantity), By law of demand(需求定律, 因price(in terms of RMB)低咗, quantity demanded(需求量)上升,
5. 當price 同quantity係反方向,咁area就會uncertain, 要示乎Ed(其實呢條題目提晒水啦"Using concept of price elasticity of demand”), 要做到area大咗,咁緊係%­in Qd > %¯ in P, 所以一定係elastic demand(彈性大於1), 同學千萬唔好漏寫percentage(百分比) --2分,同埋price & quantity 嘅方向-- 1分, 如果寫成”change in Qd is larger than change in price(只寫出數量同價格 “改變” , “幅度”) 咁就 0分
6. 畫供需圖時,留心y-axis 係price in terms of HKD, 幅圖要顯示price & quantity 嘅方向,最重要係shade area, 要做到area + 大過area -, 緊記要寫+/-, 跟據2006年嘅marking, 如果冇顯示+/-, 或+/-顛倒, 或area + 大唔過area -, 咁成幅圖就0分.

Suggested answers:
Q1 (total:2M)
The price of books in China in terms of HKD decreases (1M)
because HK dollar appreciates against RMB/ RMB depreciates against HK dollar (1M)

Q2 (total: should be 6M)
Diagram:
increase in total expenditure (TE) is larger than decrease in TE (2M)
Verbal explanation:
Mr. Chang's demand for books in China is elastic (1M)
When price of book in terms of HKD decreases, quantity demanded increases (1M)
% increase in Qd > % decrease in P (2M)-->gain in TE > loss in TE --> TE increase.


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