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Which of the following topics is more likely to be studied by microeconomists than by...

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maheen100 | Student, Undergraduate | Honors

Posted September 17, 2012 at 10:39 PM via web

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Which of the following topics is more likely to be studied by microeconomists than by macroeconomists?

-the effect of a cigarette tax on the quantity of cigarettes sold
- a consumer's optimal choice of a flat-screen tv
-the government's optimal spending level

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted September 17, 2012 at 10:58 PM (Answer #1)

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Both of the first two of these would be more likely to be studied by microeconomists than by macroeconomists.

Microeconomics looks at issues having to do with single consumers, single firms, single industries, and other such actors.  This can be contrasted with macroeconomics, which looks at things that affect an entire economy.

From this, we can see that both of the first two are microeconomic issues.  They both have to do with things that are far below the level of the economy as a whole.  One has to do with the cigarette industry only.  The other has to do with one consumer's choice.  This is in contrast to the last topic, which has to do with the macroeconomic topic of the impact of government spending on the entire economy.

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