Chapter 5: Microeconomics and Macroeconomics Flashcards
What is economics divided into?
Microeconomics and macroeconomics
What is microeconomics?
Microeconomics is the study of the behaviour and decisions of households and firms, and the performance of individual markets.
What is macroeconomics?
Macroeconomics is the study the of whole economy.
List if these examples are examples of micro or macroeconomics:
- Opportunity cost
- Unemployment level
- Growth rate
- Inflation
- Prices
- GDP
- Supply and demand
- Micro
- Macro
- Macro
- Macro
- Micro
- Macro
- Micro
What is a market?
It is an arrangement which brings buyers and sellers into contact.
True or false?
Changes in the microeconomy affects changes in the macroeconomy, but changes in the macroeconomy does not affect changes in the microeconomy
False, changes in the microeconomy affects changes in the macroeconomy and vice versa.
Who makes the decisions in micro and macroeconomics?
The economic agents
What are the three economic agents?
The households, firms, and government
Fill in the blank:
________ ______ are the decision-makers who undertake economic activities. They are the __________, who are the buyers, the _____, who are the businesses that produce goods and services, and the last one is the __________, which is the system that rules a country or region.
Economic agents, households, firms, government
What do governments do?
They produce and provide some products, provide financial benefits, and taxes and regulates the private sector
What is the aim of households(as consumers)?
They seek low prices and good quality products.
What is the private sector?
They are the firms owned by shareholders and individuals.
What is the aim of households(as workers)?
They want good working conditions with high pay
What is the aim of households(as savers)?
They want their money to be safe and to be given a good return
What is the aim of firms?
Their aim is to make as much profit as possible
