How does microeconomics differ from macroeconomics? Would the supply of iPhones in the United States be studied under microeconomics or macroeconomics? What about the growth rate of total economic output in the national economy?
What will be an ideal response?
Microeconomics is the study of how individuals, households, firms, and governments make choices, and how those choices affect prices, the allocation of resources, and the well-being of other agents. Macroeconomics is the study of the economy as a whole. Macroeconomists study factors that affect overall – in other words, aggregate – economic performance.Macroeconomics is the study of the forest as a whole. Microeconomics is the study of individual trees.
The supply of iPhones refers to the supply of a good by an individual firm, Apple. Therefore, the iPhone market will be studied under microeconomics. Microeconomics studies how individuals, households, firms and governments make choices, and how those choices affect prices and the allocation of resources. The growth rate of total economic output, on the other hand, refers to the aggregate American economy, and is therefore studied under macroeconomics.
You might also like to view...
The monetary base declines when
A) the Fed extends discount loans. B) Treasury deposits at the Fed decrease. C) float increases. D) the Fed sells securities.
Which of the following is true in a perfectly competitive market?
a. Buyers can discern sharp differences in products. b. Buyers can easily switch from one seller to another. c. Buyers tend to have strong brand loyalties. d. Buyers have a very strong influence on price.
The input that is generally hard to measure directly and consequently can be reasonably estimated with the growth accounting equation is:
A. land. B. labor. C. physical capital. D. technology.
The owner or owners control the day-to-day activities of which of the following types of business?
A) corporations and partnerships B) partnerships and sole proprietorships C) sole proprietorships and corporations D) only corporations