econ chapter 2.1 (micro & macroeconomics)

Question 1

What is microeconomics

Answer 1

The study of decision-making by INDIVIDUAL consumers, producers and households

Question 2

Microeconomics is a study of:

Answer 2

The behaviour and decisions of households and firms and the performance of individual markets

Question 3

What is macroeconomics

Answer 3

the study of the economic behaviour of the entire economy. It studies the total demand and the total supply of all goods and services.

It analyses the general price levels (inflation or deflation) in the entire economy.

Question 4

what does macroeconomics focus on

Answer 4

achieving high levels of economic growth and development through the implementation of government policies

Question 5

what is the governments main aim

Answer 5

to achieve price stability, increase employment levels, increase economic growth and have a stable balance of payments.

Question 6

What is a market

Answer 6

an arrangement which brings buyers into contact with sellers

Question 7

What are economic agents

Answer 7

those who undertake economic activities and make economic decisions

Question 8

what does microeconomics focus on?

Answer 8

-economic factors affecting choices

-effects of changes on decision makers

-behaviour of individual households and firms

Question 9

What are some real world applications of microeconomics?

Answer 9

changes in demand in fashion affecting prices-if demand increases this will tend to raise its prices

impact of gold discoveries on gold prices- prices will fall because gold supply has increased

Question 10

examples of macroeconomics

Answer 10

-government decisions about protectionism, such as the use of tariffs and import quotas

-government decisions about immigration and emigration

-Government decisions regarding eradication of poverty