Week 04 Tutorial quiz

Explain what is scarcity ?

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What are the three inventible problems face by all Economies ?

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Explain the difference between microeconomics and macroeconomics and give examples of a microeconomic and macroeconomic decision

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Offering opinions within an argument is part of

• Microeconomics

• Macroeconomics

• positive economics

• normative economics.

Explain with the use of a diagram what is shown by a production possibility frontier.

The diagram below shows the production possibility frontier for a country.

The movement along the production possibility frontier from point A to point B means that:

• the economy is more productively efficient

• the economy is benefiting from economies of scale

• the economy has spare capacity

• there is an increase in the opportunity cost of consumption goods

Explain what is happening to the economy if it is producing at point P?

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Using the diagram, calculate the opportunity cost in terms of consumer goods of increasing production of capital goods from 0 units to 5 units.

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The diagram below shows the demand curve for tablet computers. The shift of the curve from D1 to D2 would most likely have been caused by

• A fall in wages in the tablet computer industry.

• A rise in price of a good complementary to tablet computers

• A fall in the price of tablet computer components

• A rise in the price of a substitute to tablet computers

The diagram below shows the production possibility frontier private sector output and public sector output. In terms of the production possibility frontier above, the opportunity cost of moving from point L to point V is

• Zero

• MN of private sector output.

• 0B of private sector output.

• MZ of private sector output.