Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics.
Microeconomics |
Macroeconomics |
||
---|---|---|---|
The effect of government regulation on a monopolist's production decisions | |||
The government's decision on how much to spend on public projects | |||
A consumer's optimal choice when buying a flat-screen TV |
1) The answer is Micro-economic theory.
Monopolist's production decision means the individual production decision. So, "the effect of government regulation on monopolist's production decision" is a study of Micro-economic theory. Because the Micro-economic theory studies individual decisions.
2) The answer is Macro-economic theory.
Public project means the project of all people of the whole economy. So, the government spending decision on public projects is a study of Macro-economic theory. Because the Macro-economic theory studies the whole economy.
ANSWER :
First one : Macroeconomics
Second one : Macroeconomics
Third one : Microeconomics
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