The HKDSE for economics and business, accounting and financial studies (Bafs) are just one month away. So Young Post asked tutors Michael G Wong and Sharon Chan to share some last-minute tips to prepare you for these subjects.
Michael G Wong (Beacon College)
If you do not have a clear understanding of economic principles, such as opportunity cost, supply and demand, or GDP (gross domestic product) , don’t simply memorise them, because you will need to apply the concepts to the scenarios specified in the questions.
If a question asks you about how the opportunity cost changes for different situations, follow these steps: first, define the concept. Second, identify the original cost. Third, describe the change and how it affects the cost; calculate the cost.
Be aware of economic news which could help you solve hypothetical or real-life situations in the exam. A possible question could be: Explain how the Zika outbreak in Brazil would affect the opportunity cost of visitors to the Rio Olympics.
Study the meanings of sunk cost, explicit cost, implicit cost, interest and full cost.
The topic of private enterprise usually requires you to compare private limited and public limited, partnership and sole proprietorship. Remember each one’s features, advantages and disadvantages.
The principle of supply and demand is a challenging but popular topic in the DSE. The questions usually relate to current economic issues, such as inflation, quantitative easing, property, stock market, economic recovery, rising buying power and major infrastructure projects in the city.
Another question on this topic might ask you how a new measure such as the “one trip per week rule” would affect the equilibrium price and quantity of the retail market.
You need to be familiar with three approaches to measure GDP, including production approach (value-added approach), income approach, and expenditure approach. Focus most on expenditure approach.
Credit creation is also popular, but it’s tricky, because the DSE will not directly tell you which questions are related to it. You’ll have to spot it by looking for phrases such as: “maximum possible change” or “maximum possible amount of total deposits”. Figure out what these questions are asking you, as their calculations are totally different.
Make sure you understand progressive tax, regressive tax and proportional tax. Questions usually include rates, property tax, profit tax, general sales tax, stamp duties and salaries tax. Be familiar with how these taxes influence price levels or distribution of income.
Comparative advantage is based on opportunity cost. There will probably also be questions asking you to calculate the gain from trade under a certain term of trade.
It’s important to always include diagrams to demonstrate the concepts and principles, but don’t forget to label everything!
For each question, interpret the scenario, and highlight the economic terms to figure out what is being asked. Remember to give your answer in a systematic and logical way.
This month, you should do every past paper from 2012-2015. You can also do past HKCEE economics papers, as their questions are similar to the DSE.
Sharon Chan (Modern Education)
The DSE Bafs tests how well you can adapt to the commercial world, which includes managing your time well. Here is the suggested time slot:
Paper 1 (1 hour 15 minutes):
Section A (multiple choice): 30 minutes
Section B: 30 minutes
Section C: 15 minutes
Paper 2 (2 hours 15 minutes):
Section A: 35 minutes
Section B: 65 minutes
Section C: 35 minutes
Put all income and expenses in your income statement; and assets, liabilities, and capital information in your statement of affairs. As soon as you read a figure, write it in, filling in all the forms, because you will not have time to read the question twice.
Keep an eye on financial ratio analysis. The Hong Kong Examinations and Assessment Authority (HKEAA) changes some formulas, so follow HKEAA’s instructions.
For the credit period of trade receivables, use the “average trade receivables” but not the “closing trade receivables”.
For cost questions, present your work in statement form, but not the mathematical work. Breakeven and target profit questions are also popular. Use this formula:
Fixed cost: $XX
Contribution per unit: $XX
Breakeven units: XX