Explain the basic distinction between microeconomic analysis and macroeconomic analysis. Describe the types of issues that each branch of analysis focuses on
What will be an ideal response?
Microeconomic analysis focuses on the behavior of individuals, e.g., consumers and firms. It is concerned with such issues as how a firm can produce output most cheaply, how much revenue it can expect to receive from the sale of a good, and how much of a good consumers will purchase at each price. Macroeconomic analysis focuses on the overall level of economic activity. It is concerned with such issues as what factors will cause the rates of inflation and unemployment to change and what types of policies can be used to influence the overall level of economic activity.
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A monopolistic firm will shut down if
A) P < ATC for every level of output. B) P > ATC for every level of output. C) P > AVC for every level of output. D) P < AVC for every level of output.
European Vacation After staying around 1.35 US dollars per Euro for years, the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014 . What affect does this have on tourism in Europe?
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the
a. demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. b. demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. c. supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. d. supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.
Based on the answer of question 4, the payoffs for both stores will be
a. Megastore $95 and Superstore $80 b. Megastore $305 and Superstore $55 c. Megastore $65 and Superstore $285 d. Megastore $165 and Superstore $115