Public Assessment

HKDSE Econ 2015 live paper

Oct/Nov 2015

Live papers Paper 1:

On compulsory part of the curriculum

Answer all questions

45 multiple choice questions

Account for 30% of the subject marks

(without SBA)

60 minutes

Live papers

Paper 2 section A:

On compulsory part of the curriculum

Short questions

All questions are compulsory

8 short questions

50 marks

Account for 30% of the subject marks (without SBA)

Live papers

Paper 2 section B:

On compulsory part of the curriculum

Structured/essay-type questions

All questions are compulsory

4 structured questions

54 marks

Account for 31% of the subject marks (without SBA)

Live papers Paper 2 section C:

On elective part of the curriculum

Structured/essay-type questions

Attempt questions on ONE elective only

2 structured questions

16 marks each

Account for 9% of the subject marks (without

SBA)

In 2015-2018 Exam: Total time is 2 hours 15 mins

Paper 1 Number of sat: 17772

Overall mean score of 2015:

28 out of 45 question

= 62.2%

Overall mean score of 2014 = 63.7%

Paper 1 Q5 The schedule below shows the marginal cost of a firm in a perfectly

competitive market.

Output (units) 3 4 5 6 7 8 9

Marginal cost ($) 5 5.5 6 6.5 7 8 9.5

Suppose the rental of the machine hired, a fixed cost, increases by

$2 while the marginal cost for each unit of the output is reduced by

$0.5. As a result, the profit-maximising output of the firm

_____________ while the profit of the firm __________.

A. increases … decreases (12%)

B. increases … may increase or decrease (41%)

C. decreases … decreases (19%)

D. decreases … may increase or decrease (28%)

Paper 1 Q10 Which of the following will result in a rise in the total revenue of

chicken farms?

A. The price of chicken feed falls. (12%)

B. The government reduces the profits tax rate on

chicken farms.

(32%)

C. The effective quota on the sale of chickens is

increased.

(24%)

D. The government reduces the subsidy for the

producers of pork.

(32%)

Paper 1 Q17 Which of the following is an example of the divergence

between private and social benefits?

A. A security guard watches live concerts when he is

working in a concert hall.

(14%)

B. A tourist enjoys the music performed by a singer

on the street and he does not pay for that.

(45%)

C. A resident living next to a karaoke lounge cannot

fall asleep because of the noise.

(25%)

D. After the removal of the airport, the market value

of the residential flats in that region increases.

(16%)

Paper 1 Q34 Which of the following are indirect taxes in Hong Kong?

(1) property tax

(2) rates on property

(3) stamp duty on transfer of stock

(4) general sales tax

A. (1) and (2) only (5%)

B.* (2) and (3) only (20%)

C. (1), (3) and (4) only (19%)

D. (2), (3) and (4) only (56%)

Paper 1 Q44 The following table shows some information about the balance of

payments of Country A. Items $ million

Balance on goods -1 200 Balance on services 700 Net factor income from abroad 200 Net current transfer -100 Increase in reserve assets 180

According to the above data, which of the following statements are correct? (1) The current account deficit is $400 million. (2) Country A’s GDP is smaller than its gross national product. (3) The balance of payments surplus is $180 million. A. (1) and (2) only (38%) B. (1) and (3) only (25%) C. (2) and (3) only (18%) D. (1), (2) and (3) (19%)

Paper 1 Comments Time: 45 MCQs in 60 mins

Sufficient time (No. of MCQ up?)

Candidates are weaker in

- Data interpretation

- Application formula for calculation

- Integration of topics

- Macroeconomics

- social/economic issues

Paper 2 Number of sat: 17,748

Overall mean score in 2015:

53.4%

Overall mean score in 2014:

57.2%

Overall mean score in 2013:

50.0%

Paper 2 Marking

Onscreen Marking System (OSM)

Scanned images

Markers mark in Assessment Centres

Section A1, A2, B1, B2, C

Each Marker marking 16-27 marks

800 to 1000 scripts

Increase reliability

Assessment Centres Fortress Hill Assessment Centre Lai King Assessment Centre Tsuen Wan Assessment Centre San Po Kong Assessment Centre Tai Hing Assessment Centre Fanling Assessment Centre- (Fanling Rhenish Church Sec Sch) Shatin Wai Assessment Centre- (Hong Kong Education City) Sai Ying Pun Assessment Centre- (King’s College) Tseung Kwan O Assessment Centre- (YCH Wong Wah San Sec Sch) Tseung Kwan O Assessment Centre- (CMA Sun Kei Sec Sch) Che Kung Temple Assessment Centre Shek Kip Mei Assessment Centre

Paper 2 Welcome the Assistant Examiners to

comment on the candidates performance

by Section:

Section A1: (Q1, 3, 5, 6)

Section A2: (Q2, 4, 7, 8)

Section B1: (Q9, 11)

Section B2: (Q10, 12)

Section C: (Q13, 14)

Paper 2 Section A1 (Q1, 3, 5, 6) Q1 More and more famous universities offer “massive open online courses” (MOOC) to students from various backgrounds for systematic learning.

(a) Most of the teaching materials in MOOC can be accessed online by anyone free of charge. Explain whether these materials are

(i) free goods; (2 marks)

(ii) public goods. (3 marks)

(b) Some people prefer to take free MOOC while others prefer to take paid courses conducted on the university campus. If the courses are with the same contents and number of teaching hours, will the cost for a person to take a free MOOC be necessarily lower than the cost for another person to take a paid on-campus course? Explain. (3 marks)

Paper 2 Section A1 (Q1, 3, 5, 6) Q3

An increase in an effective quota in the market of a good

would lead to a reduction in deadweight loss. Do you agree?

Explain your answer with the aid of a diagram. (6 marks)

Q5

Macau has developed rapidly in recent years and some

workers in Hong Kong have been attracted to work there.

Suppose the number of job positions in Hong Kong is

constant. What would be the effect of the above phenomenon

on the unemployment rate in Hong Kong? Explain your

answer. (4 marks)

Paper 2 Section A1 (Q1, 3, 5, 6) Q6 Study the following balance sheet of the banking system in Country A.

Suppose all banks are fully loaned up and never hold excess reserves. The public always holds $150 million in cash.

Assets ($million) Liabilities ($million)

Reserves 1 000 Deposits 5 000

Loans 4 000

(a) Calculate the following items of this banking system:

(i) legal reserve ratio (1 mark)

(ii) money supply (2 marks)

A firm in Country A has received $50 million from abroad and deposited the sum of money into a bank.

(b) Calculate the new monetary base in Country A. Show your workings.(2 marks)

(c) Calculate the new money supply in Country A. Show your workings. (3 marks)

Paper 2 Section A1 Report 1(a)(i) Excellent. Most candidates showed a good understanding of

free good. 1(a)(ii) Satisfactory. Many candidates failed to realise that free

online access of MOOC implies that nobody is excluded from the consumption of such courses. Some candidates only stated the term “non-rival,” but missed the key idea of “non-rivalry or concurrent usage” in consumption.

1(b) Satisfactory. The majority of candidates were able to point out that the full cost (including both monetary and non-monetary cost) should be considered. Some of them were unable to give a proper comparison between the non-monetary cost borne by a person taking MOOC and the full cost borne by a person taking a paid on-campus course. A few candidates confused the concepts of value and cost: they wrongly regarded the lack of opportunity to interact with lecturers and classmates as part of the non-monetary cost of MOOC.

Paper 2 Section A1 Report 3 Satisfactory. Many candidates were able to illustrate

diagrammatically and explain verbally the reduction in

deadweight loss when an effective quota is increased.

However, some were unable to provide a proper explanation

for the reduction in deadweight loss (i.e., narrowing the gap

between marginal benefit and marginal cost, or reducing the

level of under-production). A minority of candidates

represented the change in quota mistakenly as a leftward

shift in the supply curve and gave a wrong discussion

accordingly.

Paper 2 Section A1 Report 5 Fair. Contrary to what is stated in the question, some

candidates assumed partial or no job replacement in the Hong Kong labour market as some workers moved to Macau. However, those who managed to provide logically consistent explanations were still given full credit. The following were common mistakes: – failure to realise that the unemployment rate is defined in

percentage terms; – mistaking the constant number of job positions for

constant number of unemployed persons; – skipping the comparison between the percentage

decrease in the unemployed population and that in the labour force.

Paper 2 Section A1 Report 6(a)(i) Excellent.

6(a)(ii) Good. Most candidates were able to add the cash in

public circulation to the deposit to calculate the money

supply.

6(b) Satisfactory. The most common mistake was to use

the formula for money supply to calculate the monetary

base.

6(c) Satisfactory. Some candidates did not sum the cash in

public circulation and the new amount of deposits to get

the new money supply.

Paper 2 Section A2 (Q2, 4, 7, 8) Q2 Many electronic product retailers are located in Mong Kok.

(a) To which type of production do electronic product retailers belong? Explain your answer. (2 marks)

(b) Suggest TWO reasons why an electronic product retailer in Mong Kok may enjoy external economies of scale. (4 marks)

Q4 Read the following news extract.

The strong preference for small flats has pushed the prices of the flats under 400 square feet to a new high in the past few months. It is expected that more and more small flats will be available for sale in the coming future.

(a) Explain ONE function of price which can be found in the above news extract. (2 marks)

(b) Explain how the supply of large flats would be affected by the strong preference for small flats. (2 marks)

Paper 2 Section A2 (Q2, 4, 7, 8) Q7

Suppose both Country A and Country B use ALL their resources in

production. Their maximum output is shown in the table below.

Rice (units) Clothing (units)

Country A 15 OR 3

Country B 8 OR 4

(a) Explain whether Country B has an absolute advantage in

producing clothing. (2 marks)

(b) The rice-exporting country exports 12 units of rice in exchange

for 3 units of clothing. Calculate the total gain from trade for the

clothing-exporting country. Show your workings. (4 marks)

Paper 2 Section A2 (Q2, 4, 7, 8) Q8 The government is considering spending a certain sum of its budget surplus on the following two proposals:

Proposal 1: To extend the free education to 15 years Proposal 2: To provide unemployment benefits

Evaluate the two proposals in terms of equality and the effect on aggregate output. (8 marks)

Paper 2 Section A2 (Report) 2(a) Good. A minority of candidates wrongly interpreted the

types of production as “types of factors of production” or “types of market structure,” and therefore gave irrelevant answers.

2(b) Fair. While most candidates were able to state the benefits of locating retail stores in Mong Kok, many failed to provide the external factors that lead to a reduction in average cost or to explain how agglomeration helps reduce costs for firms. Instead, they gave reasons related to internal economies of scale.

4(a) Poor. Some candidates confused the functions of price with those of money.

4(b) Good. A few candidates confused competitive supply with competitive demand (substitutes).

Paper 2 Section A2 (Report) 7(a) Good. A minority of candidates misinterpreted the word “ALL”

as both countries having the same amount of resources, and thus gave an incorrect comparison.

7(b)

Satisfactory. Most candidates were able to use the information in the table to calculate the opportunity costs for both countries and to find the gains from trade. However, some candidates only calculated the per unit gain instead of the total gain. A very small number of candidates used their knowledge learned in elective 2 to answer the question. It should be noted that, instead of writing their answers (e.g., the opportunity costs of the two countries) properly in the designated space, some candidates simply scribbled them immediately next to the table in the question without explanations, making it difficult for markers to give any credit to such rough work.

Paper 2 Section A2 (Report) 8 Satisfactory. The majority of candidates managed to provide

an evaluation of the policy proposals in terms of equality and aggregate output. Some common mistakes: – failure to analyse “equality” effects of the policies on

“equality” in the sense of equalising opportunities and equalising incomes;

– providing a discussion of the pros and cons of the two proposals without using the given criteria (i.e., equality and output);

– stating the policy effects on such macroeconomic variables as consumption, investment, and government expenditure without relating them to the change in AD / SRAS / LRAS;

– inaccurate use of terms like “real” output, “aggregate” output, and “potential” output.

Paper 2 Section B1 (Q9,11) Q9. McDonald’s is one of the major fast food chains in Hong Kong.

(a) McDonald’s is a private limited company in Hong Kong. State ONE advantage and ONE disadvantage of forming a private limited company over forming a public limited company. (2 marks) (b) McDonald’s has expanded its business by operating McCafé, which sells premium coffee like other coffeehouses such as Starbucks. To which type of expansion does this belong? Explain. (2 marks) (c) The price of a cup of Espresso in McCafé is lower than that in Starbucks. Suggest TWO possible reasons to explain why there is such a price difference. (4 marks) (d) In July 2014, McDonald’s was accused of using expired meat as an ingredient for its food. Later, the related products were destroyed. Explain whether the value of these destroyed products would be included in the calculation of Hong Kong’s gross domestic product. (2 marks)

Paper 2 Section B1 (Q9,11) Q11 Figure 1 shows the percentage changes in direct tax revenue

and nominal GDP in Hong Kong for the years 2009-2013.

Paper 2 Section B1 (Q9,11) Q11 (a)(i)With reference to Figure 1, describe the relationship

between the percentage change in direct tax revenue and the

percentage change in nominal GDP for the years 2009-2013 and

compare their trends. (2 marks) (a)(ii)Briefly explain the relationship you described in (a)(i). (2 marks) (b) An accountant commented that the tax base of Hong Kong is

narrow and suggested the government should introduce new types

of indirect tax. Explain, with ONE example, how the introduction of a

new indirect tax would broaden the tax base. (2 marks)

Paper 2 Section B1 (Q9,11) Tobacco duty is an indirect tax in Hong Kong. The Financial

Secretary has increased the tobacco duty rate with the aim of

discouraging smoking. Q11(c) An economist stated, “Other things being constant, the rise

in the tobacco duty rate would not effectively reduce the quantity

consumed of duty-paid cigarettes.” Justify his statement

WITHOUT using a diagram. (4 marks) (d) In addition to the rise in tobacco duty, the Customs has made

more effort to prevent the illegal sale of duty-not-paid cigarettes

and has cracked down several illegal sellers. Is it possible that the

quantity transacted of duty-not-paid cigarettes would increase?

With the aid of a diagram, explain your answer. (7 marks)

Paper 2 Section B1 (Report)

9(a) Excellent.

9(b) Good. Most candidates were able to identify the type of

expansion and give a correct explanation.

9(c) Good. Many candidates gave well-reasoned explanations

for the lower price charged by McCafe. A minority

overlooked keywords in the question and only offered

such reasons for the price difference as costs and/or

qualities without actually comparing the cost/quality

difference between Starbucks and McCafe.

Paper 2 Section B1 (Report)

9(d) Poor. Many candidates were under the misconception

that the destroyed meat should be counted in GDP

because it was bought by McDonald’s and should thus be

included in its investment, or that it involves production and

should thus be counted even if it is destroyed eventually.

Those who were able to get their stands correct failed,

however, to provide satisfactory explanations. Some

regarded the expired meat as stock or non-final goods.

Others stated that the values of these destroyed products

were included in GDP when they were initially produced,

so they should not be counted again or else they would be

being counted twice.

Paper 2 Section B1 (Report) 11(a)(i) Good. Most candidates were able to describe correctly the

relation between the percentage change in direct tax revenue and the percentage change in nominal GDP, though only a small number of candidates compared their changes.

11(a)(ii) Fair. Common mistakes included: - repeating the answers of 11(a)(i) without trying to explain

the reasons behind the trend they had identified; - explaining why nominal GDP increased or decreased in

particular years without explaining how these changes related to direct tax revenue;

- arguing that a rise in direct tax revenue implies a rise in income, which would in turn result in an increase in consumption, investment, and thus GDP.

Paper 2 Section B1 (Report) 11(b)

Satisfactory. A minority of candidates wrongly gave

some existing indirect tax (e.g., general rates and

stamp duties) as their answers. Some failed to apply

the concept of tax base to offer a proper explanation.

Instead, they limited themselves to discussing the

properties of indirect taxes, which were irrelevant to this

question.

Paper 2 Section B1 (Report) 11(c) Fair. The following mistakes were common:

- neglecting the word “justify” and providing arguments against the statement;

- over-emphasising the opportunity for the smokers to turn to the black market for cigarettes, while ignoring that the question only concerns duty-paid cigarettes;

- mistaking “effectiveness” for “efficiency.”

11(d) Fair. Although most candidates were able to apply the supply- demand model to this somewhat complicated case, some failed to provide a comprehensive analysis. Common mistakes included: – missing the keyword “duty-not-paid” and wrongly focusing the

discussion on duty-paid cigarettes; – overlooking the effect of the rise in tobacco duty on the demand

for duty-not-paid cigarettes; – mis-locating the new equilibrium point despite correct

specification of the shifts in demand and supply curves.

Paper 2 Section B2 (Q10,12) Q10 Suppose a football club in Hong Kong hired a famous

football player from Brazil as the coach for a 2-month course

for kids. He received $8 million as his salary and returned to

Brazil afterwards. However, the enrollment of the course was

poor and the revenue from the course was $3 million only.

(a) What is the effect of organising the above course on each

of the following items? Explain.

(i) Hong Kong’s gross domestic product (GDP) (2 marks)

(ii) Hong Kong’s gross national product (GNP)(3 marks)

Paper 2 Section B2 (Q10,12) Q10(b) The following are contracts for two professional football

players.

Explain TWO advantages of Contract B over Contract A from the viewpoint of the employer. (4 marks) (c) Professional football players often retire in their mid-thirties. Although most of them have once been well-paid as footballers, some of them can only find low-paid jobs after retirement. Explain the above phenomenon in terms of labour mobility. (3 marks)

Contract A Player A: $10 000

per week

Contract B Player B:

$8 000 per match + $10 000 for each

goal scored

Paper 2 Section B2 (Q10,12) Q12

Research shows that the “Individual Visit Scheme” of mainland

tourists has brought economic benefits to Hong Kong. However,

more and more Hong Kong residents have called on the government

to reduce the number of mainland tourists to Hong Kong under the

Scheme.

(a) How would the current account of Hong Kong be affected if the

government limited the scale of the Scheme so that the number of

tourists from the mainland would drop? Explain your answer. (2

marks)

An economist uses the AS-AD model to analyse the current situation

in Hong Kong. In his analysis, point E in Figure 2 represents the

initial short-run equilibrium of the Hong Kong economy.

Paper 2 Section B2 (Q10,12)

Paper 2 Section B2 (Q10,12) Q12 (b) He points out that the government can help the economy restore to its long-run equilibrium. With the aid of Figure 2, explain how the reduction in the number of tourists from the mainland can lower the output level to Yf. (5 marks) (c) He also states that even without the help of the government, market forces can restore the economy to its long-run equilibrium. WITHOUT using a diagram, explain how market forces can lower the output level to Yf in the long run. (4 marks) (d) Some residents complained that the large number of tourists overloaded the public transportation system, resulting in a large increase in travel time for all passengers. Explain, in terms of externality, why inefficiency may exist when the transportation system is overcrowded. (4 marks)

Paper 2 Section B2 (Report) 10(a)(i) Fair. Most candidates were able to point out that GDP

would increase as production activities were involved in this case. However, some missed such keywords as “current” or “resident producing unit” in their answers. A minority of candidates either confused “resident” with “resident producing unit” or thought that both the coach’s salary and the revenue from the course should be counted in GDP.

10(a)(ii) Satisfactory. Many candidates were able to state the relation between GDP and GNP and to identify the coach’s income as factor income from abroad.

10(b) Good. A few candidates did not analyse the problem from the perspective of the employer. Others only gave a term or a short phrase as answer without elaboration or application to the question.

10(c) Good. A minority of candidates failed to indicate which kind of labour mobility (occupational or geographical) they were talking about.

Paper 2 Section B2 (Report)

12(a) Excellent. A minority of candidates mistakenly thought that, with fewer tourists coming to Hong Kong, the export of goods would fall.

12(b) Excellent. Most candidates were able to explain how a decrease in net export would lead to a fall in AD and its resulting output effects. A few candidates mistakenly thought that, as fewer tourists came to Hong Kong, less goods and services would be produced, so SRAS would drop.

12(c) Satisfactory. Some candidates were unable to explain the adjustment in a logical and systematic way without the aid of a diagram.

12(d) Satisfactory. The majority of candidates were able to state the negative external effects that would arise from overloading. However, only a few candidates were able to relate the increased travel time to the time cost and the higher marginal social cost. Many only stated the inefficiency condition as “MB not equal to MC,” without specifying that “MSC > MSB” in this particular case.

Paper 2 Section C (Q13-14) Q13 Super Power is the only licensed power supplier in City X. It adopts uniform pricing to maximise its profit. (a) Indicate the quantity that it would produce as Q1 and the corresponding price as P1 in Figure 3. Briefly explain your answer. (3 marks) (b) Explain, with the aid of Figure 3, why it is inefficient to adopt uniform pricing. (2 marks) (c) The government imposes a lump sum tax, which is a fixed amount regardless of the quantity produced, on Super Power. (i) Explain whether Super Power’s marginal cost will increase because of the lump sum tax. (2 marks) (ii) Indicate the after-tax output and price of Super Power as Q2 and P2 respectively in Figure 3. (2 marks)

Paper 2 Section C (Q13-14)

Paper 2 Section C (Q13-14) Q13(d) Super Power charges the domestic users $1.2 per unit of

power consumed and the industrial users $0.9 per unit of power

consumed. Does this pricing arrangement constitute price

discrimination? Explain. (3 marks)

(e) Super Power has taken over the major coal supplier, which

provides 90% of raw materials for the production of electricity in

City X. Name the anti-competitive behaviour that Super Power

may constitute and explain how such behaviour restrains

competition. (2 marks)

(f) The owners of Super Power claim the takeover in (e) is not

anti-competitive. Justify their claim with ONE reason. (2 marks)

Paper 2 Section C (Q13-14) Q14: (a) Country A requires 1 unit of labour to produce a unit of

Good X and 2.5 units of labour to produce a unit of Good Y.

Suppose labour is the only resource required for production.

Country A is endowed with 10 units of labour and the terms of trade

is 1X = 1Y. (i) Explain which good Country A will import.

(ii) Construct the production possibilities frontier and consumption

possibilities frontier of Country A in Figure 3. (4 marks) Suppose the labour force of Country A increases by 10 units. (iii) Will the direction of trade be affected? Will Country A be better

off as a result? Explain your answers with the aid of Figure 3. (6

marks)

Paper 2 Section C (Q13-14) Q14 In Figure 4, PPF is a country’s production possibility frontier where

E is the production point without trade. At point E, the domestic cost of

production of one unit of good X is 2.5 units of good Y.

Paper 2 Section C (Q13-14) Q14 (a) Explain whether the country would produce at

point N. (2 marks) (b) The slope of dotted line AB is the world price of good

X. Explain whether the country has a comparative

advantage in producing good X. (3 marks) (c) Suppose the country engages in international trade.

Indicate its production point after trade and its

consumption possibility frontier in Figure 4. (3 marks) (d) With the aid of Figure 4, explain whether the country

will gain from trade. (3 marks)

Paper 2 Section C (Q13-14) Q14 (e) After the country’s opening up for trade, its

Human Development Index (HDI) has risen. (i) Give ONE reason why international trade can lead

to a rise in HDI. (1 mark) (ii) Despite the rise in HDI, the residents in the country

generally agree that the living standard has declined.

Suggest TWO possible reasons to explain their view.

(4 marks)

Paper 2 Section C (Report)

13(a) 56% Good. In their discussions, a minority of

candidates mis-specified the “marginal cost =

marginal revenue” condition as “marginal cost

= marginal benefit” for profit maximisation.

13(b) Good. A few candidates were able to state the

inequality between marginal benefit and

marginal cost, but failed to show it in Figure 3.

13(c)

(i)(ii)

Fair. Some candidates did not realise that lump

sum tax is a fixed cost. Others thought that a

rise in fixed cost would result in a rise in

marginal cost.

Paper 2 Section C (Report) 13(d) 56% Good. Most candidates were able to identify it as a

case of price discrimination. However, some of them

failed to give full justification; they either provided a

term (e.g. third degree price discrimination) without

elaboration or tried to analyse the case using an

incomplete definition of price discrimination.

13(e) Fair. Some candidates mistook the takeover for

“exclusive dealing”. A few candidates confused

vertical backward integration with forward

integration.

13(f) Satisfactory. A small number of candidates failed to

state whether their arguments concerning

beneficiaries apply to consumers only or to the

society as a whole.

Paper 2 Section C (Report) 14(a) 44% Good. Most candidates correctly stated that the

country would not produce at point N. However, a

small number did not mention the correct reason.

14(b) Good. Some failed to give exact numbers to

support their answers.

14(c) Satisfactory. Most candidates were able to indicate

the post-trade production point. Many candidates

realised the new CPF should be tangent to the PPF,

but many did not seem to understand that the CPF

should also be parallel to the world price line. Some

candidates presented an answer with complete

specialisation. This is common in a constant-cost

case but rare in an increasing-cost case.

Paper 2 Section C (Report) 14(d) 44% Fair. While many candidates were able to point

out that the country can increase its

consumption of both X and Y, some of them

failed to indicate the possible consumption

point(s) in the diagram.

14(e)

(i)(ii)

Good. A common mistake in part (i) was a

failure to link international trade to the increase

in life expectancy and/or years of schooling,

resulting in the rise in HDI.

Mean for Q13=7.51

Mean for Q14=8.37

Paper 2 General reminder:

Please don’t use colour to indicate the

areas in the diagram

Don’t successively use symbols in the

answer.

Express the answer in a comprehensible

way: rough work write not in the

designated spaces will NOT be marked.

Paper 2 Overall comments Some candidates lack a thorough understanding of basic economic concepts and principles, and thus have difficulty in applying them to solve hypothetical or real-life problems. Candidates should strengthen their analytical skills instead of simply regurgitating concepts and theories. Some candidates do not read all the questions carefully. Candidates should devote special attention to the assumptions and conditions laid down in the questions so as to avoid giving irrelevant answers. Some candidates provided convoluted answers. Candidates should equip themselves with better language abilities as well as graphical skills, and present their answers in a clear and precise way. Some candidates were unaware of current economic issues. Candidates should pay more attention to economic news. Some candidates showed a weakness when extracting information from tables and graphs as well as when drawing well-labelled diagrams. Candidates should pay special attention to the headings, labels, and axes as they are essential to our understanding of the data presented therein.

Grading - paper marks and subject marks

Raw mark of Paper 1 (max mark): 40

Raw mark of Paper 2 (max mark): 124

Adjusted mark: Marks awarded by markers are adjusted, if necessary, to rectify lenient, strict or erratic marking.

Weighted paper mark: Marks of different papers are converted to the same comparable scale, taking into account the spread of marks in different papers and the published paper weightings, before they are combined to form the subject mark.

Grading - Grading procedures

http://www.hkeaa.edu.hk/tc/hkdse/The_Reporting_System/

1. Sample scripts selection

2. Standardisation

3. Post-marking exercise:

The grading panel will discuss and suggest a

provisional grading recommendation (including

preliminary cut score range) on each paper

through expert judgment base on:

Grading – Post-marking exercise

The level descriptors

The standards of 2012 DSE (library scripts)

Marked-live scripts, selected according to the total marks

Feedback from markers on the level of difficulty of papers

Inter-paper correlations, the mean and standard deviation of the current year’s papers

Paper mark cumulative distributions

Performance samples from 2013 and 2014 DSE (library scripts)

Grading – Panel of judges grading meeting

• preliminary cut score range

• Samples scripts around the cut score range

• Group ability index:

- constructed per level

- An index for each level based on the number of

candidates in this group (this subject) achieving

that particular level in the four core subjects

- depends on the correlation of the subject and

EACH of the 4 core subjects

Grading – Panel of judges grading meeting

Panel of judges considers:

• preliminary cut score range

• Samples scripts around the cut score range

• Group ability index (GAI) as reference Recommendation for the cut score for the subject • The panel of judges plays a very important and

independent role in setting a cut score for each

level based on the actual performance of

candidates

Grading – Internal meeting and

Public Examinations Board meeting

• Internal meeting: A senior management team

led by Secretary General of the Authority will

meet to review the recommendations of

individual subject panels. • PEB meeting: The recommendations of the

internal meeting will be reviewed at the PEB

meeting and the final cut scores of all HKDSE

subjects must be endorsed at this meeting.

Grading – Determination of

level 5** and 5*

• Statistically determined

• The highest 10% (approximately) of level 5

candidates will be awarded 5**

• The next highest-achieving 30%

(approximately) of level 5 candidates will be

awarded 5*

Grading: Standard Maintenance

• Standard of the level 1,2,3,4,5 should be

maintained across years

• the cutting scores NOT constant:

the cutting scores depends on level of difficulty

of the papers and the actual performance of the

candidates

• It is possible that a level 2 candidate perform

better in one particular question than a level 5

candidate:

the level represents the overall performance