An economic good is a good where its available quantity is insufficient to satisfy all human desires, meaning more of it is preferred. Thus, obtaining it incurs an opportunity cost.
In the HKCEE (Hong Kong Certificate of Education Examination) syllabus , Paper 2 consists of multiple-choice questions. Question 2 invariably tests the baseline rules of economic reality.
: Assuming a change in opportunity cost automatically flips the choice. Correction: A choice only changes if the cost rises above the value of the chosen item. Direct Comparison: Key Scenarios Evaluated in Public Exams
This model answer offers strong phrases and core points for exam success, mirroring the concise style of HKCEE marking schemes. hkcee 2010 econ paper 2 q2
The HKCEE examiner’s report highlighted frequent mistakes:
– "its output capacity compared to the market demand is too small."
The government must either buy the surplus (10 tonnes) or restrict production to avoid waste. An economic good is a good where its
Only goods and services produced during the specific exam year count.
: Identify what the consumer can do (e.g., Option A: Go to a movie, Option B: Work a part-time shift, Option C: Stay home and sleep).
: Students frequently add the values of all unchosen options together. Economics dictates that you can only experience one reality at a time; hence, opportunity cost is only the value of the single next-best option, never the sum of all remaining choices. Question 2 invariably tests the baseline rules of
It changes only if the value of the chosen option changes, or if the value of the next-best alternative changes.
Government imposes a maximum price (price ceiling) at $4 .
Find the free market equilibrium without intervention.