ECON1000 - Principles of Economics 1- UWI OPEN CAMPUS

NOTE: MATCH THE ANSWERS TO THE QUESTIONS

Question 1

1. Classify the following as microeconomics or macroeconomics and provide a justification for your choice.

(I)Toyota is contemplating increasing the production of SUVs based on projected future consumer demand.

(II)The impact of an increase in the price of computer chips on the market is for personal computers.

(III)The relationship between the inflation rate and changes in the quantity of money.

(IV)The impact of higher savings on economic growth.

Question 2

2.Due to heavy rains the price of ground produce increases.

(i)Which core principle is represented in the scenario?

(ii) The Explanation..

Question 3

3.Too many cooks spoil the broth.

(i)Which core principle is represented in this scenario (if any)?

(ii)Explanation..

Question 4

4.Implementation and enforcement of the seat belt law has resulted in an increase in the number of accidents.

(i) Which core principle is represented in this scenario (if any)?

(ii) The Explanation

Question 5

5.Person A and Person B produces purses and wallets. The production possibilities frontier below shows each person production of wallets and purses based in an 8-hour day.

\fT price S after tax S 65 5 45 D 3.5 2.5 2 15 05 10 15 20 25 30 35 40 45 50 53 60 65 70 quantityPerson A Person B 10 T wallets 10. T wallets 7 4 Lu 2 7 9 10 purses 7 10 PupTen