Chapter 5 - Microeconomics and Macroeconomics

Which relationship would be studied by an economist specialising in macroeconomics?

• the relationship between the inflation rate and the unemployment rate

• the relationship between the output of a firm and its costs of production

• the relationship between the price of a product and the quantity demanded by a consumer

• the relationship between the wage rate of workers and demand for labour in an occupation

Which topic is studied in macroeconomics?

• cost-push inflation

• market price determination

• public goods

• the output of a firm

What is a macroeconomic concept?

• the effect of a price change of a good

• the equilibrium price in the market for a good

• the reason for a change in a firm's behaviour

• the total spending in an economy

What is a microeconomic decision?

• a central bank reducing interest rates

• a gas firm reducing its prices

• a government increasing income tax

• a government increasing the national minimum wage

What is not included in microeconomics?

• economies of scale

• forms of competition

• individual demand

• the inflation rate

What is included in microeconomics?

• the calculation of national income and expenditure

• the effects of a change in exchange rates on the trade balance of an economy

• the effects of an increase in the price of a good or service

• the factors leading to demand-pull inflation

Who is a microeconomic decision maker?

• the director of an international trade organisation

• the entrepreneur of a firm

• the finance minister of a government

• the governor of a central bank

What is included in macroeconomics?

• the causes of a change in the price of one product

• the causes of a market failure

• the causes of determinants of price elasticities of supply

• the causes of economic growth

Which person makes macroeconomic decisions?

• a bank manager

• a government finance minister

• a shareholder in a firm

• a worker

What is an example of a macroeconomic aim?

• to create and maintain full employment

• to improve efficiency in the manufacturing sector of the economy

• to provide consumers with greater information when buying goods and services

• to encourage greater occupational mobility of labour