The slope of the production possibilities frontier is negative because it represents the trade-off between ___ and ___.
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two goods
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The slope of the production possibilities frontier is negative because it represents the trade-off between ___ and ___.
two goods
When both a decrease in demand due to expectations and an increase in supply occur simultaneously, the equilibrium price of Hong Kong residential property is likely to ___ while the equilibrium quantity is likely to ___.
decrease, increase
How would you predict the supply planned by the Arch, the actual demand from potential tenants, and the outcome of the management’s plan for the Arch Rental if priced at HK$80 per square foot?
At HK$80 per square foot, the planned supply would be 50,000 sq. ft., while the actual demand would be 40,000 sq. ft. This would result in a surplus of 10,000 sq. ft., indicating that the management's pricing strategy may not attract enough tenants.
If residents expect a further decrease in property prices, the demand for Hong Kong residential property will likely ___ due to decreased buyer confidence.
decrease
A ___ cost is a cost that has already been incurred and cannot be recovered.
sunk
Is the statement 'When firms are maximizing their profit, the society’s well-being should be maximized as a whole' normative or positive?
This statement is normative because it expresses a value judgment about what ought to happen.
What would happen if the government set a rental cap of HKD 70 per sq. ft.?
If the government sets a rental cap of HKD 70 per sq. ft., it would create a situation where the quantity demanded exceeds the quantity supplied, leading to a shortage in the market.
The market demand schedule shows that at a price of HKD 60 per sq. ft., the quantity demanded is ___ sq. ft. per month.
150,000
The statement 'When firms are maximizing their profit, the society’s well-being should be maximized as a whole' is an example of a ___ statement.
normative
Is the statement 'The increase in oil price will decrease the demand for traditional cars' normative or positive?
This statement is positive because it can be tested and validated through empirical evidence.
What is the equilibrium price and equilibrium quantity of Service Apartment, the Arch Rental in the market?
The equilibrium price is HKD 70 per sq. ft. and the equilibrium quantity is 70,000 sq. ft. per month.
With property developers able to bid for government land at a ___ price, the supply of residential properties in Hong Kong is expected to ___.
lower, increase
If the Arch Rental’s management prices the property at HKD 80 per square foot, the actual demand from potential tenants would be ___ sq. ft. per month.
50,000
How does a lower bidding price for government land by property developers affect the Hong Kong residential property market?
If property developers can bid for government land at a lower price due to increased supply, this can lead to an increase in the supply of residential properties. As supply increases, the equilibrium price may decrease while the quantity of properties available in the market increases.
Johnny is considering selling his commercial office for a peak house priced at HKD ___ million.
50
If Johnny chooses to run his own restaurant, the opportunity cost is the value of the ___ he could have earned from renting the office.
rental income
The statement 'The increase in oil price will decrease the demand for traditional cars' is an example of a ___ statement.
positive
Has the unexpected increase in demand for the VR site changed Johnny's opportunity cost for the restaurant?
Yes, the increase in demand for the VR site has raised the estimated income, which changes the opportunity cost of choosing to open a restaurant instead of pursuing the VR site.
Why is the slope of the production possibilities frontier negative?
The slope of the production possibilities frontier is negative because it reflects the trade-off between two goods; as you produce more of one good, you must give up some of the other good.
What are the predicted changes in equilibrium price and quantity of the Hong Kong residential property market if both a decrease in expected property prices and lower land bidding prices occur simultaneously?
If both events occur simultaneously, the decrease in demand due to expectations of lower prices and the increase in supply from lower land costs will likely lead to a significant decrease in equilibrium price and an uncertain change in quantity, depending on the relative shifts in demand and supply.
An example of a simplifying assumption is assuming that all consumers have ___ preferences.
homogeneous
How can the new opportunity of selling the commercial office for the peak house change the opportunity cost of Johnny's restaurant choice?
Selling the commercial office for the peak house introduces a new potential income stream, which may increase the opportunity cost of opening the restaurant, as the value of the house could represent a more lucrative alternative.
What is the opportunity cost for Johnny if he chooses to run his own restaurant in the office?
The opportunity cost for Johnny is the rental income he would have earned if he chose to rent the place out instead of running his own restaurant.
If the government sets a rental cap of HKD 70 per sq. ft., it would likely create a ___ in the market.
shortage
Economists use simplifying assumptions in their models to ___ complex realities.
simplify
What is the definition of sunk cost?
A sunk cost is a cost that has already been incurred and cannot be recovered.
Before Johnny decorates the place for the restaurant, the demand for the new VR theme game unexpectedly increases, changing his ___ cost for the restaurant.
opportunity
At a price of HKD 70 per sq. ft., the quantity supplied is ___ sq. ft. per month.
70,000
Why do economists use simplifying assumptions in their models?
Economists use simplifying assumptions to make complex real-world situations more manageable and to focus on the most relevant factors. For example, assuming that all consumers have the same preferences simplifies the analysis of market demand.
What happens to the property price of Hong Kong if residents expect a further decrease in property price?
If residents expect a further decrease in property prices, the demand for properties will likely decrease as buyers anticipate lower prices in the future. This shift in demand can lead to a decrease in the equilibrium price and quantity in the market.
