The imposition of minimum wage in Hong Kong

Economic News WorksheetScholar suggestsbanning imported mainland live chickensRecently, thousands of

Economic News WorksheetScholar suggestsbanning imported mainland live chickens Recently, thousands of live chickens in the poultry wholesale market, including local chickens, were destroyed due to the discovery of avian flu in imported mainland live chickens. Ascholar pointed out lhat there is no need to import live chickens from the mainland.Hong Kong only imports 7,000 livechickensper day and local chicken farms supply about 10,000 per day.That is, local consumption of live chickens is around 17,000. However, it is believed that local chicken farms could provide 2(),()()()-3(),000 live chickens. Thus, local chicken farms could meet the demand for live chickens. Ten years ago, local chicken farms supplied nearly 100,000 live chickens every day. However, the government has limited the number of chicken farms. As aresult, the supply of local live chickenshas decreased sharply. The scholar said, *If the government supports the development of local farms, there is much room for expansion/ Another organisation has also proposed banning imported live mainland chickens and has called upon the government to revive local agriculture. 29 January, 2014Questions 1. According to the article, both the live chicken supply and people's consumption have decreased in the past 10 years. Under what condition will the price of live chickens increase? Explain your answer with lhe aid of adiagram. 2. Suppose Hong Kong is asmall open economy and only imports live chickens from the mainland. As shown in Fig.l, the import price is Pi and the domestic supply S‘. curve of live chickens is Suppose the government bans imported live mainland chickens. a. With the aid of Fig.l, explain how the live chicken price, quantity of live chickensconsumed and the total revenue of local chicken farms in Hong Kong will change.