What is the difference between macroeconomics and microeconomics? Give an example of a question that a macroeconomist might be interested in answering, then do the same for a microeconomist
Macroeconomics is the branch of economics that looks at human behavior and choices as they relate to the entire economy. Microeconomics deals with human behavior and choices as they relate to relatively small units ---an individual, a firm, an industry, a single market. A macroeconomist would be concerned about questions that impact the whole economy such as, "How will the proposed tax cut affect unemployment, inflation and economic growth?" A microeconomist would ask questions that relate to the various parts that make up the economy such as, "How will the drought impact the price of corn?"
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Costs to the firm arising from reaching agreements on input prices with suppliers and then ensuring that terms of agreements are fulfilled, are called
A) negotiation costs. B) agency costs. C) transactions costs. D) implicit costs.
The idea that the Lorenz curve should be along the 45 degree line is consistent with
A) the productivity standard. B) the egalitarian principle. C) the conservative principle. D) none of the above.