Essentials of Economics
4th Edition
ISBN: 9781464186653
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 1P
To determine
The questions that are relevant for the study of
Concept Introduction:
Microeconomics: It refers to the economy which deals with an individual unit. Its different variables are individual
Macroeconomics: It refers to the economy which deals with the economy as a whole.
Its different variables are aggregate demand,
Expert Solution & Answer
Explanation of Solution
a. Change M’s tips, when a large manufacturing plant near the restaurant where she works closes.
This is a case of microeconomics.
- Microeconomics always deals with unit analysis, that is with small units of the economy like individual consumer, individual producer and individual firm.
- Therefore, the effect of the closure of a large manufacturing plant on M tips who is working in a nearby restaurant is a microeconomics concept.
Conclusion:
Thus, it is microeconomics study.
b. Effect on spending of consumers when the economy enters a downturn.
This is a case of macroeconomics.
- Macroeconomic deals with the economy as a whole. It is an aggregate analysis as it studies about the aggregates and averages like total output, national income and total employment.
- Therefore, the effect of recession in the economy on the aggregate spending of the consumer is the study of macroeconomics.
Conclusion:
Thus, it is a macroeconomics study.
c. Change in price of oranges when a late frost damages F’s orange groves.
This is a case of microeconomics.
- Microeconomics always deals with unit analysis that is with small units of the economy like individual consumer, individual producer and individual firm.
- Therefore, the price of oranges and changes in it due to late frost which damages F’s orange groves is an individual concept.
Conclusion:
Thus, it is microeconomics study.
d. Change in wages at a manufacturing plant when its workforce unionized.
This is a case of microeconomics.
- Microeconomic always deals with unit analysis that is with small units of the economy like individual consumer, individual producer and individual firm.
- As it is the study of a particular manufacturing plant where labor union was formed to affect the wages of the particular firm. Therefore, it is a microeconomics concept.
Conclusion:
Thus, it is a microeconomics study.
e. Effect on the U.S. export if dollar becomes less expensive in terms of other currencies.
This is a case of macroeconomics.
- Macroeconomic deals with the economy as a whole, it is an aggregate analysis as it studies about the aggregates and averages like total output, national income and total employment.
- As the exports of the country are affected due to fall in dollar price in the foreign exchange market, it is a study about the general concept. Therefore, it is a macroeconomics concept.
Conclusion:
Thus, it is a macroeconomics study.
f. Relationship between a nation’s
This is a case of macroeconomics.
- Macroeconomic deals with the economy as a whole, it is an aggregate analysis as it studies about the aggregates and averages like total output, national income and total employment.
- As the unemployment rate and inflation is aggregate concept, it is a macroeconomics concept.
Conclusion:
Thus, it is a macroeconomics study.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
. What the heck is this GDP thingy?
It is Thursday afternoon, just a few days before the holiday season starts in your region, and you decided to visit your uncle Chao who owns a local delivery company. While sitting in the living room watching the evening news with your uncle, you heard the news reporter stating the following with an optimistic tone: "According to recent studies, gross domestic product (GDP) is rising due to an increase in consumer spending. The increase in spending was due to an increase in consumer confidence because the job market has shown a positive increase in both employment and income."
Immediately, your uncle Chao looked at you with some confusion on his face and asked:
What the heck is GDP, and why does the news dude seem excited about its increase?
Does this “good” change in this GDP thingy have any effect on my delivery business? How?
Do I need to do something different to prepare for the rise in GDP? How?
3. I need people who don’t want me!
As an operations manager at a factory that produces manual tools, you were tasked with preparing a new site for expansion. The plan is to start production in the new location within 6 months from the current date. The new location requires 100 workers to operate fully. The workers you need don’t require any form of education or special skills because the tasks at the factory are simple and straightforward. In other words, you typically hire lower-skilled workers. In recent years, your company has been having problems finding workers who meet those criteria because the demand for them is so high. While sitting in your office, your teammate, Alejandra, walked to your office and said, "Have you heard the recent news about the economy? They said that investment has declined, and government spending has declined too. They also said that GDP is expected to shrink in the next 6 to 10 months. I wonder what is next."
Then, she looked at you and said:
How…
X
Apex Learning Courses
public activity 003002 assessment
K! Kahoot!
11.3.2 Quiz: Specialization
Question 5 of 10
Which term describes a business's decision to focus on producing a small
number of products?
A. Opportunity cost
B. Specialization
C. Voluntary exchange
D. Self-sufficiency
PREVIOUS
SUBMIT
Knowledge Booster
Similar questions
- Apex Learning Apex Learning Courses leaming.com/public/activity/1003002/assessment QQuizlet K! Kahoot! 1.3.2 Quiz: Specialization Question 5 of 10 Which term describes a business's decision to focus on producing a small number of products? OO A. Opportunity cost B. Specialization C. Voluntary exchange D. Self-sufficiency PREVIOUS SUBMITarrow_forwardnot use ai pleasearrow_forwardBefore the Civil War, the South traded with the North and with England. The South sold cotton and bought manufactured goods and food. During the war, one of President Lincoln's first actions was a blockade of the ports in the South to prevent this trade. The South had to increase its production of munitions and food. Draw a point to show the South's production point prior to the Civil War. Label it 1. Draw a point to show the South's consumption point prior to the Civil War. Label it 2. During the war, the South's factors of production were severely depleted and its production possibilities decreased. Draw a curve that shows the effects of the Civil War on the South's PPF. Label it PPF₁. Draw a point to show the South's production point during the Civil War. Label it 3. During the war, the South did not engage in trade. Draw a point to show the South's consumption point during the Civil War. Label it 4. 100 80- 60- Other goods and services (units) ☑ 40- 20- 200 400 600 PPF 800 1000…arrow_forward
- Suppose that a paper mill "feeds" a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $10, the second by $9, the third by $8, and so on, until the tenth unit increases profit by just $1. The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $3.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total…arrow_forwardPlanes frequently push back from the gate on time, but then wait 2 feet away from the gate until it is time to queue up for takeoff. This increases fuel consumption and increases the time that passengers must sit in a cramped plane awaiting takeoff. The following table shows the pay schedule for the flight crew. Pay Per diem Holding pay per hour Flight Attendant Captain First Officer $3 $3 $3 $20 $20 $20 Hourly wage (after push back) $38 $184 $50 Per diem pay indicates how much the flight crew earns once it checks into the airport. Holding pay indicates how much the flight crew earns after it loads the plane. Hourly wage indicates how much the flight crew earns after it pushes back from the gate and turns on the beacon. In this scenario, who does not have an incentive to push back from the gate as early as possible? Check all that apply. Captain Flight attendants Passengers First officer True or False: Allowing the airline to decide when to push back from the gate would reduce…arrow_forwardThis Wendy’s commercial confuses the notions of appreciation and consumer surplus. Recall that consumer surplus is the difference between what a consumer is willing to pay for a good and what they actually pay for it. According to standard economic theory, consumer surplus must always bearrow_forward
- In economics, the cost of producing a good: Question 6 options: is the maximum value of other goods that could have been produced using the same resources. equals the out-of-pocket costs incurred in producing the good. is the value of inputs used up in production. is the value of other goods that could have been produced using the same resources.arrow_forwardPlease correct answer and don't used hand raiting and don't used Ai solutionarrow_forwardnot use ai pleasearrow_forward
- Gates Doubles Down on Malaria Eradication The End Malaria Council, convened by Bill Gates and Ray Chambers, seeks to mobilize resources to prevent and treat malaria. The current level of financing is too low to end malaria. Bruno Moonen, deputy director for malaria at the Gates Foundation, says that more resources, more leadership, and new technologies are needed to eradicate malaria in the current generation. Is Bruno Moonen talking about production efficiency or allocative efficiency or both? Bruno Moonen is talking about _______. A. production efficiency but not allocative efficiency B. production efficiency and allocative efficiency C. allocative efficiency but not production efficiency D. neither production efficiency nor allocative efficiencyarrow_forwardWhat challenges do medical facilities face when trying to become more culturally competent? What kinds of assumptions do providers sometimes make about people from other cultures? What factors may cause providers to relate to patients in a biased manner? What can healthcare organizations do to ensure cultural competence among their employees?arrow_forwardBrazil, Russia, India, China, and South Africa, also known as BRICS, are emerging countries poised to be dominant economic players in the 21st century. What are some of the political, legal and economic conditions that help or hinder economic expansion for these countries?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education