1. Which of the following are macroeconomic topics/issues and which are microeconomic ones?
(a) The level of consumer spending Micro / Macro
(b) Subsidies paid to farmers Micro / Macro
(c) The level of Australian exports Micro / Macro
(d) The price of cotton cloth Micro / Macro
(e) The rate of unemployment Micro / Macro
(f) The average wage rate paid to textile workers Micro / Macro
(g) The total amount spent by Australian consumers on clothing and footwear Micro / Macro
(h) The amount saved last year by Australian households Micro / Macro
2. Economists assume that economic decisions are made rationally. In the case of consumers, rational decision making means:
(a) That consumers will not buy goods which increase their satisfaction by only a small amount.
True / False
(b) That consumers will attempt to maximise their individual satisfaction for the income they earn.
True / False
(c) That consumers buy the sorts of goods that the average person buys. True / False
(d) That consumers seek to get the best value for money from the goods they buy. True / False
3. Make a list of three things you did yesterday. What was the opportunity cost of each? Have a look at your neighbours’ lists and see if you agree with their estimates of the opportunity costs.
4. A country is capable of producing the following combinations of goods and services per period of time, assuming that it makes full use of its resources of land, labour and capital.
|Goods (units) |100 |80 |60 |40 |20 |0 |
|Services (units) |0 |50 |90 |120 |140 |150 |
(a) Draw the production possibility curve for this country on the following diagram.
(b) Is it possible for this country to produce the following...