What Does Microeconomics Study

question 15

Multiple Choice

What does microeconomics study?

• A) the behaviour of consumers
• B) how individual households and firms make decisions
• C) how government affects the economy
• D) how the economy as a whole works

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Definitions:

Production Function

A mathematical model in economics that describes the relationship between input resources and the output of goods or services a firm can produce.

Long-Run Cost Curve

A graphical representation showing the lowest cost at which any given level of output can be produced in the long run, where all inputs are variable.

Industry Supply Curve

A graph that shows the quantity of goods that producers are willing and able to sell at different price levels in a specific industry.

Marginal Costs

Marginal costs are the additional costs incurred to produce one more unit of a product or service.