1. Which of the following are macroeconomic issues and which are microeconomic ones? (a) The level of government spending. miCTU/Inacro (b) A grant given by the government to the UK film industry. (c) The level of investment in the UK by overseas firms. micro macro (d) The price of cotton cloth. (e) The rate of inflation. (f) The average wage rate paid to textile workers. micro mucro (g) The total amount spent by UK consumers on clothing and footwear. micro/macro (h) The amount saved last year by households micro macro 2 The coast of one good measured in terms of what we must sacrifice is called the: (a) real cast. (b) opportunity cost. (c) average cost. (d) potential cost. (c) social cost. 3, That which we forgo, or give up, when we hoice or a decision is known as Al equity B) causation. 9 correlation. DI opportunity cost 4. A country is capable of producing the following combinations of goods and services per period of time, awcuming that it makes full use of its resources of land, labour and capital Good (units) Services (units) (a) Draw the production possibility curve for this country on the following diagram. Goods 180 120 140 160 Services (b) Is it possible for this country to produce the following combinations of goods and services? (i) 80 units of goods and 50 units of services. Yes /No (ii) 70 units of goods and 90 units of services Yes/ No (il) 40 units of goods and 100 units of services. Yes / No (c) What is the opportunity cost (in terms of services) of producing 20 extra units of goods when this country is initially producing: () 60 units of goods (ii) 20 units of goods 5. It is normal to group factors of production into three broad categories, These are: 2