Microeconomics is best described as the study of:
A) inflation, unemployment, gross national product, and the nation's economy as a whole.
B) how markets interact in the aggregate economy.
C) the choices made by individual households, firms, and governments.
D) marginal changes in the economy.

Question

Quizplus · Accepted Answer

Microeconomics is concerned with the decisions made by individual households, firms, and governments, and how those decisions affect the allocation of resources in the economy. It does not focus on the aggregate economy as a whole (which is the domain of macroeconomics) or on specific variables like inflation, unemployment, or gross national product. Instead, microeconomics examines how people make choices about what to buy, how much to produce, and how to allocate resources based on their preferences, constraints, and incentives. Typically, microeconomics analyzes the behavior of individual consumers and producers in markets for specific goods and services, and how their interactions determine the prices, quantities, and qualities of those goods and services. It also explores how government policies, such as taxes, subsidies, and regulations, affect market outcomes and social welfare.

Microeconomics Is Best Described as the Study Of