Question

1. Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?

1. Why do national economies grow?
2. What percentage of consumer income is spent on entertainment?
3. What happens to worker productivity when the job shifts to a 4-day workweek?
4. How is the electric industry harmed by the passage of new clean air legislation?

2. Exhibit 2-1 production possibilities curve data
consumption goods capital goods

10 0

9 1

7 2

4 3

0 4

According to the information, the opportunity cost of producing 3 units of capital is:

1. 3 units of consumption goods.
2. 4 units of consumption goods.
3. 6 units of consumption goods.
4. 7 units of consumption goods.
   
   3. Exhibit 2-3 production possibilities curve data
   Capital goods           0      10      20      30      40
   Consumer goods   200    180   140      80       0
   According to the data given in Exhibit 2-3, the production of 140 units of consumer goods and 10 units of capital goods:
   A) Is possible but it would be inefficient.
   B) May be a result of unemployment.
   C) May be a result of unused natural resources.
   D) All of the above.
   E) none of the above.

Answer 1

1)The microeconomist would not study why do national economies grow because in microeconomics, we study about economics at an individual level , whereas in macroeconomics, economy is studied from a nation’s point of view. So option a is the correct answer.

2) When 3 units of capital goods is produced ,we can produce 4 units of consumption goods. But if we produce 0 units of capital goods then we can produce 10 units of consumption goods.

So the opportunity cost of producing 3 units of capital goods is (10-4)=6 units of consumption goods.

So , option C is the correct answer.

3) in the given production possibilities curve data, we can see that with the production of 140 units of consumer goods we can produce 20 units of capital goods. In the given case we are producing 140 units of consumer goods and only 10 units of capital words . This production combination is possible but it would be inefficient as we can produce more of capital goods keeping the out of consumer goods constant.This may be a result of unemployment or maybe a result of a unused natural resources.

So option D is the correct answer.