Question
Microeconomics is the study of A. how households and firms make choices, how they interact in markets, and how the government attempts to influence their B. how individuals and firms act altruistically to better society. C. how individuals make good decisions for themselves but hurt society. D. the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Ask by Tyler Ellis. in the United States
Feb 03,2025
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Answer
Microeconomics is the study of how households and firms make choices, how they interact in markets, and how the government influences these choices.
Solution
The correct answer is:
**A. how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.**
### Explanation:
- **Microeconomics** focuses on the behavior of individual households and firms, their decision-making processes, and how they interact in various markets. It also examines how government policies can affect these choices and market outcomes.
- **Option B** is incorrect because microeconomics does not primarily focus on altruism.
- **Option C** is misleading as microeconomics studies individual decision-making without implying that it necessarily harms society.
- **Option D** describes **macroeconomics**, which looks at the economy as a whole, including broader topics like inflation and unemployment.
Thus, option A accurately captures the essence of microeconomics.
Reviewed and approved by the UpStudy tutoring team
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Simplify this solution Beyond the Answer
Microeconomics dives into the fascinating world of choices made by households and firms. It examines everything from how consumers allocate their limited resources to how businesses set prices and produce goods. Essentially, it’s the nuts and bolts of the economy, where the decisions of tiny players create ripples in the broader market! In real-world application, microeconomics plays a pivotal role in our daily lives. It helps us understand how changes in supply and demand can affect prices at our local grocery store or why a company may choose to cut prices during a sale. By grasping these concepts, we can become savvy consumers and make informed choices that benefit our wallets!
