Question

2. In a single sentence, contrast microeconomics and macroeconomics. Next, categorize each of the following issues as a microeconomic issue, a macroeconomic issue, or not an economic issue. a. The national unemployment rate b. The decision of a worker to work overtime or not c. A family's choice to have a baby d. The rate of growth of the money supply e. The national government's budget deficit f. A student's allocation of study time across two subjects 3. Which of the following predictions appear(s) to follow from a model based on the assumption that rational, self-interested individuals respond to incentives? a. For every ten exam points Myrna must earn in order to pass her economics course and meet her graduation requirements, she will study one additional hour for her economics test next week. b. A coin toss will best predict Leonardo's decision about whether to purchase an expensive business suit or an inexpensive casual outfit to wear next week when he interviews for a high-paying job he is seeking. c. Celeste, who uses earnings from her regularly scheduled hours of part-time work to pay for her room and board at college, will decide to purchase and download a newly released video this week only if she is able to work two additional hours.

Answer 1

2)

a.It is macroeconomics because it involves economy widephenomena.

b. It is Microeconomics, because it is a decision made by anindividual

c. It is Microeconomics because it is a decision made by households

d. This is macroeconomic issue because the rate of money supply is concerned with the entire economy or all individuals in the economy.

e.This is macro economic issue as it is concerned with the budget deficit of the entire economy or the national government

f. This is a micro economics issue as an individual decision of a student in the allocation of his study time.

3)

a.Based on the rational assumption

b.Not based on rational assumption

c.Based on the rational assumption