Question 1 (7 marks)
Part A. Analyse each situation and answer the blanks based on the economic classification of good and services. (1 mark each)
- Research shows that in countries where incomes are high and continue to exhibit an increasing trend, couples decide to have less children. Children are regarded as a/an _______________ good.
- A beer business in NSW sources glass bottles from a supplier in Victoria as well as tin bottlecaps from a company in Western Australia to package and ship its final product. For the beer business, glass bottles and tin bottlecaps are _______________ goods.
- A marathoner crossed the finished line after 5 hours of running. His support team had a can of Red Bull energy drink, a bottle of vitatmin enriched water, a jug of orange juice and a bottle of red wine on hand and the runner can make his own choice. For the thirsty runner — the sports drink, water, juice and wine — are ______________ goods.
- Mary received a job promotion. With her salary increase, Mary decides to buy a new car despite having a perfectly usable car bought just 8 months ago. Cars in this scenario can be considered a/an _______________ good.
Part B. Classify whether the 4 situations above fall under microeconomics or macroeconomics (1 mark). Justify your answer (2 marks).