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    30 views5 pages

    UGBS 201-Microeconomics and Business

    Uploaded by

    maxiluuv

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    UNIVERSITY OF GHANA BUSINESS SCHOOL DEPARTMENT OF FINANCE UGBS 201: MICROECONOMICS AND BUSINESS TUTORIAL SET ONE 1. Define the following terms as used in economics; a) Scarcity b) Choice ©) Scale of Preference 4d) Trade off €) Opportunity Cost f) Microeconomics 9) Macroeconomics h) Self Interest i) Social interest 2. Distinguish between a normative statement and positive statement in economics. 3. Explain whether the following statements are positive or normative economic statements. a eae Hillary Clinton was elected President of the United States in 2008," is a normative or positive statement. housing practices are too high in Accra Ghana was adjudged the seventh filthiest country in the world in 2015 since we indirectly pay NHIL, everyone ought to enroll on the NHIS In order for Ghana to improve upon its trade balance, citizens should adopt the habit of consuming made in Ghana goods the developing world, particularly Africa has experienced the highest urban growth at 3.5% per year in the past two decades | don’t think there should be any landfill sites because these things that we call waste are the raw materials that we need to produce either energy compost or something else. 7. h. Flood victims should pay for their own rebuilding i, The government should increase tariffs on Japanese cars to protect the American car industry from competition," is a normative or positive statement. |. An increase in the tax on gasoline increase the price of gasoline k. Universal access to quality health insurance is the most important domestic policy issue of our time. “All children should receive free health care" is an example of what kind of ‘statement? m. The minimum wage should be increased to $8.50 per hour. 1. Lower ticket prices would lead to more people attending ballgames ©. Every American household should have health care insurance coverage p. Car prices should be affordable. Classify the following topics as relating to microeconomics or macroeconomics a. Jospong group of companies’ decision about how many towing trucks to purchase b. Esther's budget on how much to spend on transport c. the relationship between the supply of money and the general price levels d._ the impact of high public debts on private sector investment e. the effect of government policies on inflation What is an economic model? Your aunt is thinking about opening a hardware store. She estimates that it would cost Gh¢ 500,000 per year to rent the location and buy the stock. In addition, she would have to quit her gh¢ 50,000 per year job as an accountant. (i) What is your aunt’s opportunity cost of running a hardware store for a year? (ii) What cost would her accountant measure? (iii) If your aunt thought she could sell Gh¢ 510,000 worth of merchandise in a year, should she open the store? Obama drives up miles-per-gallon requirements ‘Suppose the government passes a law which it requires that emissions from all new vehicles must be cut from 354 grams to 250 grams. To meet this new standard, the price of anew vehicle will rise by $1,300. Calculate the opportunity cost of reducing the emission level by 1 gram. Source: USA, May 20, 2009 (ans. Check Bade and Parkin, pg. 109) 8. Accountry is producing only two goods with its available resources and technology on a given PPF as shown below. Possibility COCOA (MILLION COTTON (MILLION DOLLAR PER YEAR) DOLLAR PER YEAR) A 70 0 B 65 50 c 60 55 D 55 64 E 0 67 a. Use the production possibilities frontier to show and explain the concepts of scarcity, production efficiency, opportunity cost. b. Calculate opportunity cost of cotton for all the levels and explain intuitively why opportunity cost is increasing 9. UGBS is known to produce two goods: exercise books and cloth. the following is the Production possibility frontier tabular illustration for UGBS: Books (x) 0 Cloth (y) 1698 1620 138 1517 197 1328 244 1072 285, ™m 321 342 408 =e a9 FP like for UGBS. 10. Country A and country B produce kelewele (x) and grapes (y). The production possibility frontier for A and B can be represented by the following equations: A: 2x + 3y = 12 Bix+y=5 a) Using two separate graphs, draw the PPF for both countries by plotting kelewele (x) on x- axis and grapes (y) on y-axis. b) Consider the following combinations: (i) S.units of kelewele and 2 units of grapes, (ii) 1 unit of kelewele and 4 units of grapes, (iii) 2 units of kelewele and 2 unit of grapes.

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