Question

Identify which of the following would be studied as a part of microeconomics, and which would be studied as a part of macroeconomics. You may do this quite briefly. Simply list the letters A thruJ - and write "micro" or "macro" next to each one.

 a- Costco

 b - The Bahamas

 c - International trade

 d - GDP (Gross Domestic Product)

 e - Danielle's Plumbing and Heating

 f- Debra's Chicken Wings and Soda Fountain

 g - Inflation

 h - The Red Cross

 i - A trip to the grocery store

 j- The effects of changes in tax policy

Answer 1

Microeconomics is a study of individual units while macroeconomics is a study of aggregates. Economic decision making of Individuals, households and businesses are considered for study under microeconomics. Whereas study of national level aggregates is considered to be a part of macroeconomics.

The segragation of things given in the question under micro and macro economics can be simply based on one logic that individual units are considered for the study under microeconomics whereas national level aggregates are studied under macroeconomics.

a -- micro (because costco is an individual unit as a company)

b -- macro (because Bahamas is a country. Any variable related to it would be a national level aggregate)

C -- macro (international trade is a national level aggregate)

d -- macro (GDP or national income is a national level aggregate)

e -- micro (Danielle's shop belongs to an individual unit)

f -- micro (Debra's shop belongs to an individual unit)

g -- macro (inflation is a national level aggregate)

h -- micro (red cross society is an individual unit as a society)

i -- micro (a trip to a grocery store constitutes an indivdiual unit's expenditure)

j -- macro (any change in tax policy is a national level policy change and will have economy wide implications or effects)