Film Studies 1020E Study Guide - Cinema Of Hong Kong, Schizophrenia, Neurosis

21) The principal reason that production possibilities have grown more rapidly in Hong Kong than in Canada over the last 40 years is because A) Hong Kong has more natural resources. B) of foreign aid to Hong Kong. C) of cheap Hong Kong labour. D) Hong Kong has devoted a larger proportion of its resources to capital accumulation. E) Hong Kong has fewer workers.

Discuss the following:

The aggregate expenditure in the Hong Kong Economy. (150 words)

The current macroeconomic activity in Hong Kong. (200 words)

Suppose there are only two goods: electronic watches and toys. The cost of producing 1 unit of electronic watches in Hong Kong is 5 units of toys

(a)Calculate the cost of producing 1 unit of toys in Hong Kong.

(b)Explain if Hong Kong has a comparative advantage in producing watches or toys based on the information provided and your answer in (a).

(c)Suppose the terms of trade is 1 unit of electronic watches can exchange for 6 units of toys. If there are no transport costs and transaction costs, explain which goods will be exported by Hong Kong. And what is Hong Kong's unit gain from exports? Briefly explain.