Economics for Managers 2e Paul Farnham
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Solutions to End of Chapter Problems
Technical Questions 1. Microeconomics focuses on the behavior of individual consumers, firms, and industries as they operate in a market economy. It analyzes how these various groups respond to changes in prices that affect their consumption, production, and selling decisions. It also describes how firms and consumers interact in various types of markets and can be used as a basis for determining competitive strategies. Macroeconomics focuses on the overall economic environment in which businesses operate. It analyzes the spending decisions of different sectors of the economy—the household, business, government, and foreign sectors. Macroeconomic policy deals with the issues of inflation, unemployment, and economic growth. Changes in the macroeconomic environment influence firms through the microeconomic issues of demand, cost, revenues, and profits. 3a. This is a description of a perfectly competitive market. It discusses factors influencing the demand and supply of soybeans, where the focus is on the price and quantity in the entire market, not the...