ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The relationship between the size of the money supply and the rate of inflation.
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The effects of aggregate consumer debt on overall consumption spending.
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The effects of an income tax reduction on the size of the national budget deficit.
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How consumers respond to a change in gasoline prices.
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Detailed explanation-1: -Microeconomics is based on models of consumers or firms (which economists call agents) that make decisions about what to buy, sell, or produce-with the assumption that those decisions result in perfect market clearing (demand equals supply) and other ideal conditions.
Detailed explanation-2: -Common microeconomics topics are supply and demand, elasticity, opportunity cost, market equilibrium, forms of competition, and profit maximization.
Detailed explanation-3: -The effect of a large government’s budget deficit on the economy’s price level is more likely to be studied in macroeconomics. This is because the government’s budget deficit and price level are variables that affect the economy as a whole.
Detailed explanation-4: -Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services. In macroeconomics, the subject is typically a nation-how all markets interact to generate big phenomena that economists call aggregate variables.