In Broad Terms the Difference Between Microeconomics and Macroeconomics Is

question 334

Multiple Choice

In broad terms the difference between microeconomics and macroeconomics is that

• A) microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.
• B) they use different sets of tools and ideas.
• C) microeconomics studies the effects of government taxes on the national unemployment rate.
• D) macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not.

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Definitions:

Comparative Advantage

The ability of an individual or country to produce a particular good or service at a lower opportunity cost than others.

David Ricardo

A British economist known for his theories on comparative advantage and rent, significantly influencing the field of economics.

Adam Smith

An 18th-century Scottish economist and philosopher best known for his work "The Wealth of Nations," which laid the foundation for classical economics and the concept of the invisible hand guiding free markets.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than competitors.