Difference between microeconomics and macroeconomics.
Briefly discuss the difference between microeconomics and macroeconomics.
Briefly explain whether each of the following is primarily a microeconomic issue
or a macroeconomic issue.
a The effect of higher cigarette taxes on the quantity of cigarettes sold.
b The effect of higher income taxes on the total amount of consumer
spending.
c The reasons for the economies of East Asian countries growing faster
than the economies of sub-Saharan African countries.
d The reasons for low rates of profit in the airline industry.
5. You have exams in economics and statistics coming up and five hours available
for studying. The table shows the trade-offs you face in allocating the time you
will spend in studying each subject.
HOURS SPENT STUDYING EXAM SCORE
CHOICE ECONOMICS STATISTICS ECONOMICS STATISTICS
A 5 0 95 70
B 4 1 93 78
C 3 2 90 84
D 2 3 86 88
E 1 4 81 90
F 0 5 75 91
a Use the data in the table to draw a production possibility frontier graph.
Label your vertical axis ‘Score on economics exam’ and label your
horizontal axis ‘Score on statistics exam’. Make sure you label the values
where your production possibility frontier intersects the vertical and
horizontal axes.
b Label the points representing choice C and choice D. If you are at choice
C, what is your opportunity cost of increasing your statistics score?
c Under what circumstances would A be a sensible choice?