As you can see in the link below, microeconomics can be defined as the study of the constituent parts of the economy. Macroeconomics studies the “forest,” or the whole economy. By contrast, microeconomics studies the “trees,” or the smaller parts that make up the whole economy. Let us look at some examples of microeconomic questions.
- Does an increase in the minimum wage lead to more unemployment among young people? This question looks at young people,...
As you can see in the link below, microeconomics can be defined as the study of the constituent parts of the economy. Macroeconomics studies the “forest,” or the whole economy. By contrast, microeconomics studies the “trees,” or the smaller parts that make up the whole economy. Let us look at some examples of microeconomic questions.
- Does an increase in the minimum wage lead to more unemployment among young people? This question looks at young people, who are only a part of the overall economy.
- If gas prices go down for a long time, will people buy more cars that are large and have bad gas mileage? The market for these cars is just one part of the overall economy.
- If the price of a particular pharmaceutical rises, how much will the quantity demanded of that pharmaceutical drop? The market for that pharmaceutical is a small part of the overall economy.
All of these questions have to do with parts of the economy rather than the economy as a whole. Therefore, they are examples of microeconomic questions.
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