Microeconomic
1. Indicate whether each of the following statements applies to microeconomics or macroeconomics, and why: 12 Marks Total
a. The unemployment rate in Canada was 7.0 percent in January 2010
Answer: This is the macroeconomic statement because it describes the unemployment rate of the whole country.
b. A Canadian software firm discharged 15 workers last month and transferred the work to India.
Answer: This is the microeconomic statement because it focuses in an individual Canadian software firm of how they make decision in transferring their 15 workers to other workplace in India.
c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.
Answer: This is the microeconomic statement because it talks about specific incident that happened in Florida which causes the raise in price of one specific product which is the oranges.
d. Canadian economic output i.e. GDP (Gross Domestic Product) adjusted for inflation grew by 3.0 percent in 2010.
Answer: This is the macroeconomic statement because it describes the GDP of how much goods produced effects the inflation of the whole country in Canada.
e. Last week the Scotia Bank lowered its interest rate on business loans by one-half of 1 percentage point.
Answer: This is the microeconomic statement because it gives the information of the individual firm - Scotia Bank and what they did last week with the interest rate on business loan.
f. The Canadian consumer price index an indicator of national inflation rose by 2.2% in 2011.
Answer: This is the macroeconomic statement because it describes the rate of growth of the whole national inflation in 2011.
2. The Consumers Budget Lines: See pages 8 and 9. Suppose you won $15 on a Lotto Canada ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy
a. The unemployment rate in Canada was 7.0 percent in January 2010
Answer: This is the macroeconomic statement because it describes the unemployment rate of the whole country.
b. A Canadian software firm discharged 15 workers last month and transferred the work to India.
Answer: This is the microeconomic statement because it focuses in an individual Canadian software firm of how they make decision in transferring their 15 workers to other workplace in India.
c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.
Answer: This is the microeconomic statement because it talks about specific incident that happened in Florida which causes the raise in price of one specific product which is the oranges.
d. Canadian economic output i.e. GDP (Gross Domestic Product) adjusted for inflation grew by 3.0 percent in 2010.
Answer: This is the macroeconomic statement because it describes the GDP of how much goods produced effects the inflation of the whole country in Canada.
e. Last week the Scotia Bank lowered its interest rate on business loans by one-half of 1 percentage point.
Answer: This is the microeconomic statement because it gives the information of the individual firm - Scotia Bank and what they did last week with the interest rate on business loan.
f. The Canadian consumer price index an indicator of national inflation rose by 2.2% in 2011.
Answer: This is the macroeconomic statement because it describes the rate of growth of the whole national inflation in 2011.
2. The Consumers Budget Lines: See pages 8 and 9. Suppose you won $15 on a Lotto Canada ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy