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Homework answers / question archive / 1) Analyze whether each of the following is primarily a micro economic or a macroeconomic issue: i

1) Analyze whether each of the following is primarily a micro economic or a macroeconomic issue: i

Economics

1) Analyze whether each of the following is primarily a micro economic or a macroeconomic issue:

i. Setting the price for a cup of coffee.

ii. Measuring the impact of tax policies on total household spending in the economy.

iii. A household?s decision regarding whether or not to go on vacation.

iv. A worker?s decision regarding which job to accept.

v. Designing government policies to address issues with the social security program.

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i)The setting up the price of the cup is related to the microeconomic issues. The microeconomics deals with the action of individuals and companies in determining the allocation of scarce resources. This issue helps in fixing the price of the product.

ii) Measuring the influence of tax policies on complete consumer spending in the economy. This problem linked to macroeconomics, because the above statement tells about the policies of tax which possible impact the whole economy. Whereas, the answer refers to the impact being measured on the entire spending of the consumer. Thus, while measuring the impact of the tax policies concerning the spending of the total household within an economy is a macro-economic issue.

iii)The decision of the household related to the microeconomic issue. The microeconomic tries to learn how individuals, households, and companies make a decision, the circumstances that mold the decision, and how the decision affects others.

iv)The worker's decision regarding the job is related to the microeconomic issue.

v) The designing of government policies to address issues is related to the macroeconomic issue. The macroeconomic estimate is used by the government to help in the expansion and evaluation of the economic policy.