Question

1. Give an example to show that macroeconomic variables depend upon the level and behaviour of microeconomics.

Answer 1

Answer:

As the tomato ripens, its colour starts to change from green to yellow and then eventually to red. This is due to the breakdown of chlorophyll, which in turn synthesises a red carotenoid (another pigment group), lycopene. When ripe, the carotenoid can easily be seen as the dominant colour of the tomato, ie red.

Answer 2

Answer:

Microeconomics studies individual prices, quantities and markets, on the other hand macroeconomics studies the behaviour of the economy as a whole. It examines the forces that affect firms, consumers and workers in the aggregate.