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DSE Economics Mock (Paper 2): Short Questions, Data Response and Elective, with Answers
TUTORZONE ORIGINAL MOCK PAPER · HKDSE ECONOMICS PAPER 2 (SHORT, DATA RESPONSE, ELECTIVE)
Written to the HKEAA 2027 framework: the public examination has Paper 1 at 30% (multiple choice, 1 hour, compulsory part, all questions compulsory) and Paper 2 at 70% (2 hours 30 minutes: Section A short questions 26%, Section B structured/essay-type/data response 35%, Section C elective 9%, one of two electives). This paper demonstrates five Paper 2 questions (56 marks, our own allocation) with model answers, working and marking notes.
How many papers are in DSE Economics and what do they carry?
Direct answer: two papers: Paper 1 30% (multiple choice, 1 hour, compulsory part, all compulsory) and Paper 2 70% (2 h 30 min: Section A short questions 26%, Section B structured/essay/data response 35%, Section C elective 9%, one of two electives).
Assessment at a glance (2027)
| Component | Content | Weighting | Duration |
|---|---|---|---|
| Paper 2 (short, data response, elective) | Section A short questions 26%, Section B structured/essay/data response 35%, Section C elective 9% (one of two) | 70% | 2 h 30 min |
| Paper 1 (multiple choice) | Compulsory part, all questions compulsory | 30% | 1 hour |
Paper 2 runs 2 h 30 min: about 45 minutes on Section A, 70 on Section B, 30 on the elective and 5 to check units. Every calculation needs the expression and the unit (HK$ billion, dollars, units, %); a bare answer earns part marks at best. In data-response questions copy the figures given, then write the causal chain as because-so.
How this paper was built
This is a TutorZone original mock paper: the questions follow the 2027 framework (Paper 2 at 70% over 2 h 30 min in three sections), and the mark allocation is our own because HKEAA does not publish per-question marks.
Questions and answers are TutorZone originals; no HKEAA question or in-copyright text is reproduced, and every figure was computed and re-checked programmatically.
Pacing
| Section | Marks | Suggested time | What to do first |
|---|---|---|---|
| Paper 2 (short, data response, elective) | 70% | about 45 min on Section A, 70 min on Section B, 30 min on Section C and 5 min to check | show every step, then one line of economic reasoning |
| Paper 1 (multiple choice) | 30% | about 1 min 30 s each, keeping 8 min to check | concept discrimination and the direction a curve shifts |
How should the 2 h 30 min of Paper 2 be split?
Direct answer: four blocks: about 45 min on Section A, 70 min on Section B, 30 min on Section C and the last 5 min checking units and working.
Paper 2 demonstrated: two Section A, two Section B, one Section C (56 marks)
Sections A and B test the compulsory part and are all compulsory; Section C tests the elective part and in the real paper you answer from one of the two electives only.
Question 1 (8 marks)
Section A: gross domestic product. An economy records, in HK$ billion: private consumption 800, gross investment 200, government spending 300, exports 150, imports 100; net factor income from abroad +20; consumption of fixed capital 50; population 7.5 million. (a) Find GDP by the expenditure approach; (b) find GNP and NNP; (c) find GDP per capita in dollars.
Question 2 (8 marks)
Section A: price elasticity of demand. A product’s price falls from $20 to $18 and quantity demanded rises from 400 to 460 units. (a) Using the original price and quantity as the base, find the price elasticity of demand; (b) state whether demand is elastic or inelastic; (c) find total revenue before and after the cut and say whether the result matches (b).
Question 3 (14 marks)
Section B: unemployment and the labour force (data response). In year 1 the labour force is 3.90 million and employment 3.70 million; in year 2 they are 4.00 million and 3.76 million. (a) Find the unemployment rate in each year to one decimal place; (b) the unemployment rate rose while the number employed also rose – explain; (c) name one fiscal tool that could lower the unemployment rate and explain how it works.
Question 4 (14 marks)
Section B: price ceiling and quota. In a market Qd = 500 – 10P and Qs = 20P – 100 (Q in units, P in dollars). (a) Find the equilibrium price and quantity; (b) with a price ceiling of $12, find the shortage; (c) if instead a quota limits total supply to 200 units, find the price buyers pay, the price sellers receive and the total quota rent.
Question 5 (12 marks)
Section C: the banking system and credit creation. A banking system holds $100 billion of initial deposits with a 20% required reserve ratio. (a) Assuming no cash drain and no excess reserves, find the maximum total deposits and the new credit created; (b) explain how the money multiplier relates to the reserve ratio; (c) discuss the likely effect of a higher required reserve ratio on credit and on the price level.
How much working does an economics calculation need?
Direct answer: three steps: the formula (GDP = C + I + G + (X – M)), the substitution with each step shown, then the unit and one line of economic reasoning. A bare final answer earns part marks at best.
Model answers, working and marking notes
Question 1
(a) GDP = 800 + 200 + 300 + (150 – 100) = 1,350 (3 marks). (b) GNP = 1,350 + 20 = 1,370; NNP = 1,370 – 50 = 1,320 (3 marks). (c) 1,350 x 109 / 7,500,000 = $180,000 (2 marks). Write net exports as the bracketed (exports – imports); GNP adds net factor income, NNP then subtracts consumption of fixed capital.
Question 2
(a) Quantity change = (460 – 400) / 400 = +15%; price change = (18 – 20) / 20 = -10%; PED = 15% / (-10%) = -1.5 (4 marks). (b) The absolute value 1.5 exceeds 1, so demand is elastic (2 marks). (c) Revenue before = 20 x 400 = $8,000, after = 18 x 460 = $8,280, up by $280; with elastic demand a price cut raises revenue, which matches (b) (2 marks). Show both percentage changes, not just -1.5; the minus sign means price and quantity move in opposite directions.
Question 3
(a) Year 1 unemployed = 3.90 – 3.70 = 0.20 million, rate = 0.20 / 3.90 = 5.1%; year 2 unemployed = 4.00 – 3.76 = 0.24 million, rate = 0.24 / 4.00 = 6.0% (4 marks). (b) The labour force grew by 0.10 million while employment grew by only 0.06 million, so the unemployed rose from 0.20 to 0.24 million: new entrants (school leavers, homemakers) were not fully absorbed by the extra jobs (4 marks). (c) For example higher government infrastructure spending: government spending is a component of aggregate demand, so aggregate demand rises, firms hire more, derived demand for labour increases and unemployment falls; a profits-tax cut works through investment incentives (6 marks). (b) compares absolute numbers, not just the percentages; (c) needs the tool, aggregate demand and derived labour demand in three steps.
Question 4
(a) 500 – 10P = 20P – 100 gives 30P = 600, so P = $20 and Q = 500 – 200 = 300 units (4 marks). (b) At the $12 ceiling, Qd = 500 – 120 = 380 and Qs = 240 – 100 = 140, so the shortage is 240 units (4 marks). (c) With a 200-unit quota, buyers pay 500 – 10P = 200, so P = $30, and sellers receive 20P – 100 = 200, so P = $15; the rent is $15 per unit and $15 x 200 = $3,000 in total (6 marks). A quota must be fed into both functions, giving two different prices; a ceiling is simply substituted into both.
Question 5
(a) Maximum deposits = 1,000 / 0.2 = $5,000 billion; new credit = 5,000 – 1,000 = $4,000 billion (5 marks). (b) Multiplier = 1 / required reserve ratio = 1 / 0.2 = 5; the higher the ratio, the smaller the multiplier and the less credit a given deposit base supports (3 marks). (c) Credit contracts, funds for investment and consumption fall, aggregate demand falls and inflationary pressure eases; in the short run investment, output and employment may dip, and the size of the effect depends on existing excess reserves and firms’ appetite to borrow (4 marks). (a) shows the deposit divided by the ratio; (c) gives both the benefit for prices and the cost for growth.
How should a Section B data-response answer be organised?
Direct answer: copy the figures given, make the comparison, then write the causal chain: aggregate demand rises, so firms hire, so derived demand for labour rises and unemployment falls. Every link needs support from the data.
Where these marks are usually lost
| Mistake | What it looks like | What it costs | Instead |
|---|---|---|---|
| Answer without working | Writing GDP as 1,350 only | The method marks are lost | Write 800 + 200 + 300 + (150 – 100) |
| Mixing up GDP and GNP | Adding net factor income into GDP | The concept mark goes | GDP plus net factor income is GNP; subtract consumption of fixed capital for NNP |
| Elasticity inverted | Reading -1.5 as less than 1 and calling it inelastic | The conclusion flips | Compare the absolute value 1.5 with 1 |
| Ceiling and quota confused | Using one function to get one price in a quota question | Two prices answered as one | Feed the quota into the demand and the supply function separately |
How to use this paper
First sit: the full 2 h 30 min, Sections A to C in order, no notes.
Mark it: check every expression, unit and causal chain, and record which step failed.
Second sit: redo after three to seven days, aiming to finish inside 2 h 10 min and tightening the Section B answers.
Drill order: topic by topic first (elasticity, national income, market intervention, money and banking), then whole papers under time.
What should I do after finishing this paper?
Direct answer: log the three error types separately (bare answers, wrong units, inverted elasticity); redo the paper in three to seven days inside 2 h 10 min; then switch to Paper 1 multiple choice for speed of concept discrimination.
FAQ
Is this an HKEAA paper?
No. The questions, answers and working are TutorZone originals, not HKEAA past papers or official marking references.
How many papers does DSE Economics have?
Two: Paper 1 at 30% (multiple choice, 1 hour, compulsory part, all compulsory) and Paper 2 at 70% (2 h 30 min, Section A 26%, Section B 35%, Section C elective 9%).
Must I answer both electives in Section C?
No. The real paper asks for one of the two electives. One is demonstrated here; drill one question from the other elective too.
Official references
| Resource | What to check |
|---|---|
| HKEAA 2027 HKDSE Economics Assessment Framework | Confirm Paper 1 30% / Paper 2 70% (Section A 26%, B 35%, C 9%) and the durations |
| https://www.tutorzone.com.hk/en-dse-economics-paper-1-mock-2027/ | DSE Economics Paper 1 mock (MC with answers) |
| https://www.tutorzone.com.hk/en-dse-economics-paper-1-2-drill-guide/ | DSE Economics papers 1 and 2 drill guide |
Related: practice area · DSE Economics Paper 1 mock · papers 1 and 2 drill guide
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