Question

Which of the following would be considered an example of microeconomics?

A. inflation rates of all North and South American countries

B. community credit union with 5 branches

C. Gross National Product

D. international trade agreement

Answer 1

Explanation:

The key realization here is that microeconomics, as the prefix says, deals with the economy on a narrow scale, for instance, the economic decision making of individual actors.

Here are some examples of microeconomics:

How a local business decides to allocate their funds

How a city decides to spend a government surplus

The housing market of a particular city/neighborhood

Production of a local business

In general, microeconomics is concerned with decision making that has low-level effects, that is, a city, where as microeconomics has high-level, large-scale effects, that effects nations.