Label each of the following as microeconomics or macroeconomics questions. A) Ho

Question

Label each of the following as microeconomics or macroeconomics questions.  

A) How will an increase in the price of beef impact the quantity of chicken sold in California?

B) How do rising global oil prices influence inflation in the United States?

C) What factors influence a graduating senior’s decision to enter the labor market or go to graduate school?

D) How does a family determine whether to purchase name brand cereal or generic cereal?

E) How will the recent cuts to corporate taxes affect the unemployment rate in San Bernardino?

Explanation / Answer

Let us first understand how do we differentiate between microeconomics and macroeconomic questions.

Microeconomics questions are related to a small unit, a firm, a company or an organization. It can be thought of sometimes a small group of firms as well.

Macroeconomics questions are more related to a broad area e.g. an industry, an economy which would include a no. of units taken together.

Now, let's move to the original question:

A. Here we can see the increase in the price of beef impacting the quantity of chicken sold in California. Look at the impact of the price change. We know that this event is related to a small unit o.e. beef. Thus, one unit implies microeconomics question.

B. We are talking at an economy level, in this case, thus macroeconomics question for sure.

C. We can see that graduating senior is a small unit, thus it is a microeconomics question.

d. A family (a single unit) is involved in this decision making, thus it is a microeconomics question.

e. The unemployment rate is to be seen at an economy level, thus this is a macroeconomics question.

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