HKCEE 2010 Economics Paper 2 Question 2 tests the concept of opportunity cost, with the correct answer, D, representing the highest-valued option foregone. The question typically requires distinguishing the next-best alternative from the sum of all forgone options or irrelevant costs. View the question in the HKCEE Economics Multiple Choice paper on HKCEE Economics Multiple Choice - Scribd
The question usually presents a market equilibrium and then introduces a government policy (e.g., a price ceiling below equilibrium or a production quota). It asks candidates to determine the change in and Consumer Surplus . hkcee 2010 econ paper 2 q2
Claiming cost does not exist in a planned economy (false; resources are still scarce regardless of the economic system). Key Truth: HKCEE 2010 Economics Paper 2 Question 2 tests
: If the value of the alternative choice changes (e.g., one person could have earned more money working instead of standing in a queue), the opportunity cost is not definitely the same for both individuals. Why Other Options are Incorrect ❌ It asks candidates to determine the change in
Try this twist: If the government instead sets a minimum price of $80 agrees to buy the entire surplus at that price, recalculate producer surplus and government expenditure. Answer: Government buys 10 tonnes at $80 = $800 expenditure; PS then includes surplus sale, making PS = ( 450 + (80 \times 10) ) minus cost of producing extra 10 units? That yields even larger PS and huge taxpayer cost.
To show an increase in the opportunity cost of investing in shares, the value of the alternative (forgone) option must increase. If the expected return on