TUT 1 ECO 121

1. Which one of the following is a microeconomic issue?

A. The rate of economic growth in Japan.

B. The South African inflation rate.
C. The price of maize in Lesotho.
D. The unemployment rate in Zimbabwe.
The total production of goods and services in Zambia

2. Which one of the following is a macroeconomic issue?

A. The demand for houses in Cape Town.

B. The supply of tomatoes in South Africa.
C. The price of bananas in Natal.
D. The total exports of South African goods and services to the rest of the world.
E. The total sales of beer in South Africa.

Which one of the following is a macroeconomic concept?

A. The price of petrol.

B. The demand for potatoes.
C. The consumer price index.
D. The supply of pumpkins.
The e-toll fee in Gauteng

Which one of the following is a macroeconomic issue?

A. A sharp rise in the price of vegetables.

B. A shortage of maths teachers.
C. A surplus of tomatoes in Limpopo.
D. A rise in the inflation rate.
An increase in medical tariffs

Which one of the following statements is false?

A. The determinants of a countrys economic growth are an example of a macroeconomic

issue.
B. The total production of wine in South Africa is a macroeconomic issue.
C. The determination of the price of maize is a microeconomic issue.
D. Inflation is a macroeconomic issue.
The production of tomatoes is a microeconomic issue.

The essence of the economic problem is that:

A. there is a need for a price system.

B. inflation exists in many economies.
C. exports seldom pay for imports.
D. resources are limited but human wants are unlimited.
two-thirds of the worlds population experience a food shortage

Macroeconomics is a branch of economics that studies:

A. the determination of the price of a specific product.
 B. the behaviour of individual decision-making units in the economy.
C. decisions by households regarding the most efficient use of resources.
D. the effects and consequences of the aggregate behaviour of all decision-making units.
E. both A and D above.

Which one of the following is NOT a macroeconomic issue?

A. South Africas inflation rate.
B. The total production of goods and services in Botswana.
C. The total production of cement in South Africa.
D. The total number of unemployed persons in South Africa.
Economic growth in South Africa

Which one of the following statements is correct?

A. Macroeconomics is not concerned with scarcity.
B. Macroeconomics is not concerned with limited means.
C. Macroeconomics is not concerned with the choices of individual consumers.
D. Macroeconomics is not concerned with opportunity cost.
Macroeconomics is not concerned with unlimited wants

Simple economies can be described in terms of three major economic flows. These are:

A. income, spending and saving.

B. spending, production and saving.
C. income, saving and production.
D. income, spending and production.
E. income, spending and net exports.

Aggregate spending on South African production comprises:

A. private consumption, government spending, private investment and total savings.

B. private consumption, government spending, private investment and net exports.
C. private consumption, government transfers, private investment and net exports.
D. private consumption, government investment, private savings and net exports.
E. private consumption, government spending, private investment and spending by foreigners
on South African goods.

Which one of the following is NOT a major source of spending in the economy?
A. Households
B. Banks
C. Firms
D. Government
E. The foreign sector

Which one of the following statements is incorrect?

A. Money is the most important factor of production. Without money, nothing can be
produced.
B. Natural resources (also called land) is one of the factors of production.
C. Both the quality and the quantity of factors of production are important.
 D. Capital as a factor of production refers to tangible things that are used to produce other
things.
E. Although the quantity of labour is important, the quality of labour is usually more
important.

Discussion questions
Distinguish between microeconomics and macroeconomics and provide two examples of
microeconomic issues and two examples of macroeconomic issues in South Africa today

Mention the three basic purposes of macroeconomic theory

Briefly discuss the main components of total spending in the economy

What are the three basic flows in the economy and how are they related?
What are the basic types of income in the economy? How do they relate to the factors of
production?

List and briefly discuss the five objectives of macroeconomic policy