Economics Assignment

Running Head: ECONOMICS ASSIGNMENT. 1
ECONOMICS ASSIGNMENT
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ECONOMICS ASSIGNMENT. 2
Economics Assignment.
I. Indicate whether the relationships are direct or inverse (Kariuki, 2015).
a. Inverse relationship this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
b. Direct relationship, this is because an increase in consumption of one good
results to the increase in consumption of the other good.
c. Direct relationship, this is because an increase in consumption of one good
results to the increase in consumption of the other good.
d. Inverse relationship, this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
e. Inverse relationship, this is because an increase in consumption of one good
results to a decrease in consumption of the other good.
II. Indicate whether the situation falls on Macroeconomics or Microeconomics
(Rima, 2015).
a. Macroeconomics because it affects the entire economy.
b. Microeconomics because it only affects individuals.
c. Microeconomics because it only affects individuals.
d. Microeconomics because it only affects individuals.
e. Macroeconomics because it affects the entire economy.
III. Indicate whether they are Positive or Normative economics statements (Hazari,
2016).
a. Positive economics statement this is because it is based on evidences that can
be proved and verified.
b. Normative economics statement this is because it is an opinion that cannot be
proved and verified.

ECONOMICS ASSIGNMENT. 3
c. Positive economics statement this is because it is based on evidences that can
be proved and verified.
d. Normative economics statement this is because it is an opinion that cannot be
proved and verified.
IV. PPC of Skateboards and Bicycles represented below.
a. The opportunity cost of bicycles in terms of skateboards when economy
moves from b to c.
= 38 – 32
= 6
From c to d
= 32 – 20
= 12
The answer indicates the law of increasing opportunity cost because the
opportunity cost moves from 6 to 12.
b. The economy cannot produce 38 skateboards and 2 bicycles because the
resources are only limited to producing 38 skateboards and 1 bicycle.
Producing 2 bicycles and 38 skateboards will mean that they have to increase
the resources which are limited.