Micro Chapter 1

Why has microeconomics evolved into an empirical discipline?

Computers have made using empirical analysis easier and faster. In economic terms, the relative price of empirical analysis has decreased.

How are consumption and production interconnected?

Consumption and production decisions interconnect to determine the market price and supply. This is because producers produce the goods and services that consumers consume.

What differentiates microeconomics from macroeconomics?

Microeconomics looks at the specific economic actions of consumers and producers, whereas macroeconomics is a broader examination of the combined economic behavior of all consumers and producers in an economy.

What tools do we use to study microeconomics?

Microeconomics relies on tools for graphs and mathematics in addition to empirical methods to explore microeconomic theories and phenomena.

Name one instance in which you were a consumer.

Most of you make multiple consumption decisions each day, from the coffee you buy in the morning to the classes, textbooks, and notebooks you purchase for your education.