In Part, Microeconomics Is Concerned with

question 455

Multiple Choice

In part, microeconomics is concerned with

• A) how a business firm decides upon the amount it produces and the price it sets.
• B) changes in the economy's total output of goods and services over long periods of time.
• C) factors that explain changes in the unemployment rate over time.
• D) the Federal Reserve's policy decisions.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the prices of goods, leading consumers to replace more expensive items with cheaper alternatives.

Demand

The desire and ability of consumers to purchase goods and services at different prices, reflecting how much of a product consumers are willing and able to buy.

Surge Prices

A dynamic pricing strategy that increases prices in response to high demand and limited supply, commonly used in ride-sharing services.

Determinants of Market Demand

Factors that influence the total demand for a product or service in a market, including price, income levels, tastes, and population demographics.