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Macro vs Micro

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Macro vs Micro

Choose the best answer in Part 1. In Part 2, classify each example as microeconomic or macroeconomic. Use complete sentences for written responses.

Identify the economic scale

1.Which situation is mainly a microeconomic issue?
  • The annual inflation rate across the UK rises.
  • A Manchester bookshop changes the price of a popular novel.
  • The UK unemployment rate increases.
  • The Bank of England changes the Bank Rate.
2.What is the main focus of macroeconomics?
  • How one household chooses between two products
  • How a single firm organises its production
  • How the economy as a whole performs
  • How one local market sets its prices
3.Which topic could be examined at both the microeconomic and macroeconomic levels?
  • A single shopper comparing two brands
  • A change in energy prices
  • One restaurant choosing its opening hours
  • A local firm's decision to buy new equipment

Classify and explain

4.Classify each example as microeconomic (MI) or macroeconomic (MA): a) A supermarket lowers the price of its own-brand cereal. b) The UK’s national unemployment rate falls. c) The government changes income tax rates. d) A local gym loses members to a nearby competitor. e) The Bank of England raises interest rates.
5.In your own words, distinguish between microeconomics and macroeconomics. Include one example of each.
6.Suppose the price of petrol rises sharply in the UK. Describe one possible microeconomic effect and one possible macroeconomic effect.

Apply the ideas

7.A small florist in Bristol is considering opening a second shop. Identify two microeconomic factors the owner should investigate.
8.Explain one way a sustained rise in UK inflation could affect households.
9.Give an example of how many separate microeconomic decisions could contribute to a macroeconomic outcome. Explain the connection.

3 printable pages

  • Macro vs Micro, page 1 of 3: Identify the economic scale

    Page 1

  • Macro vs Micro, page 2 of 3: Classify and explain, Apply the ideas

    Page 2

  • Macro vs Micro, page 3 of 3: 8. Explain one way a sustained rise in UK inflation could affect households.

    Page 3

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