Subject Structure
 
S4 Economics Subject Structure
Cycle No.
Contents / Key Points
1 – 4
 
 
1.    Basic Economic Concept
  • Scarcity, choice and opportunity cost
  • The three basic economic problems
  • Specialization and exchange
  • Positive and normative statements
5 – 13
2.    Production
  • Types / stages of production
  • Types of goods and services produced
  • Division of labour
  • Factors of production
  • Production and costs in the short run and long run
  • Expansion and integration of firms
14 – 16
3.   Ownership of firms
  • Forms of ownership
  • Shares and bonds as sources of capital
17 – 24

4.    Market and Price

  • Law of demand
  • Individual demand and market demand
  • Individual supply and market supply
  • Interaction between demand, supply and price
  • Money price and relative price
  • Changes in demand and supply
  • Price elasticity of demand
  • Price elasticity of supply
  • Market intervention

 

 

S5 Economics Subject Structure

Cycle No.

Contents / Key Points

1 – 2

1.    Competition and Market Structure

  • Perfect competition and imperfect competition(monopolistic competition, oligopoly and monopoly )
  • Profit maximization and output determination

3 – 12

2.    Efficiency, Equity and the Role of Government

  • Consumer surplus and producer surplus
  • Competition and efficiency
  • The roles of government :
  • Market failure
  • Equity and income inequality

13 - 15

3     Measurement of Economic Performance – National Income

  • Meaning of national income (GDP / GNP)
  • Circular flow of economic activities
  • GDP at current and constant market prices
  • GDP at factor cost
  • Per capita GDP: growth rate of GDP
  • GNP = GDP + income from abroad
  • Uses and limitations of national statistics as an indicator of economic welfare and for international comparison
  • Measurement of the general price level

16 – 17

4.    Macroeconomic Problems

  • Inflation and deflation
  • Unemployment and underemployment
  • Business Cycle

18 – 20

5.     National Income Determination and Price Level

  • Aggregate demand
  • Reasons for a downward sloping AD curve
  • Determinants of aggregate demand
  • Aggregate supply
  • Reasons for an upward sloping SR AS curve
  • Reasons for a vertical long run AS curve
  • Factors affecting short run and long run AS
  • Determination of level of output and price
  • Determination of the equilibrium level of output and price level in the AS – AD model
  • Change in the equilibrium level of output and price level caused by change(s) in the AD and /  or AS.

21 - 24

6.    Fiscal policy

  • Principles of taxation
  • Two common classifications of taxation
  • Comparison of the effects of progressive tax, proportional tax and regressive tax
  • Comparison of the effects of direct taxes and indirect taxes
  • Government revenue in Hong Kong
  • Public expenditure
  • The budget
  • The budget of the HKSAR Government

 

S6  Economics Subject Structure

Cycle No.

Contents / Key Points

1

1.    Money & Banking

  • Barter
  • Money
  • Banking
  • Hong Kong as a financial centre

2

2.    Money supply and money creation

  • The issue of notes and coins in Hong Kong
  • Money supply
  • Money creation
  • The process of money contraction

3

3.    Money demand and money market equilibrium

  • Factors affecting the allocation of wealth
  • Cost of holding money
  • Demand for money
  • Money market equilibrium and determination of equilibrium nominal interest rate

4

4.    Monetary policy and quantity theory of money

  • Monetary policy
  • Quantity theory of money

5 – 6

5.    International Trade (I) – free trade and principle of comparative advantage

  • Absolute advantage and comparative advantage
  • The principle of comparative advantage
  • Distribution of gains from specialization and trade
  • The presence of transport costs and transaction costs
  • Other reasons for international trade            

7 – 8

6.    International Trade (II) – trade barriers and external trade of Hong Kong

  • Free trade vs restricted trade
  • Types of trade barriers
  • Effects of tariffs and quotas on a small economy
  • External trade in Hong Kong

9 – 10

7.    International finance – exchange rate and balance of Payments

  • Exchange rate
  • Effects of change in exchange rates on international Trade
  • The linked exchange rate system in Hong Kong
  • The balance of payments account

11 – 12

8.    Monopoly pricing (Elective One)

  • Profit-maximisation under simple monopoly pricing
  • Comparison between perfect competition and monopoly
  • Price discrimination
  • Conditions for price discrimination

9.    Anti-competitive behaviours

  • Horizontal agreements
  • Vertical agreements
  • Mergers
  • Other forms of anti-competitive behaviours
  • Do anti-competitive trade practices always harm consumers?

10.    Competition policy

  • Objectives of competition policy
  • Dominant firm abusing its market power
  • Competition policy: justifications and concerns
  • Cross-sector or sector-specific approach?
  • Cross-sector competition policy for Hong Kong