Chapter 1, Problem 4P

To determine

(a)

The branch of economics represented by the headline "US Unemployment Rate Reaches Historic High".

Answer to Problem 4P

The branch of economics represented by the headline "US unemployment rate reaches historic high" is macroeconomics.

Explanation of Solution

Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.Unemployment rate is an aggregate measure of joblessness in the country. Therefore, the news about the unemployment rate in US would be a macroeconomic representation.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.

To determine

(b)

The branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin".

Answer to Problem 4P

The branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin" is microeconomics.

Explanation of Solution

Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc. General Motors is an individual company whose one of the plants is shut down. This is a microeconomic decision by a micro unit General Motors. Thus, the branch of economics represented by the headline "General Motors Closes Auto Plant in Wisconsin" is microeconomics.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.

To determine

(c)

The branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices".

Answer to Problem 4P

The branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices" is macroeconomics.

Explanation of Solution

Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc. An OPEC decision leading to increase in general level of prices would be a macroeconomic phenomenon since general price level is a macroeconomic variable. Hence, the branch of economics represented by the headline "OPEC Action Results in a General Increase in Prices" is macroeconomics.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.

To determine

(d)

The branch of economics represented by the headline "The Cost of Healthcare Rises for Employees".

Answer to Problem 4P

The branch of economics represented by the headline "The Cost of Healthcare Rises for Employees" is macroeconomics.

Explanation of Solution

Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.The rise in the cost of healthcare is a macroeconomic concept since the healthcare is now costly for the economy as a whole.Therefore, the branch of economics represented by the headline "The Cost of Healthcare Rises for Employees" is macroeconomics.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.

To determine

(e)

The branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession".

Answer to Problem 4P

The branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession" is macroeconomics.

Explanation of Solution

Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.Recession refers to the slowing down of economic activity characterized by falling output, prices and employment. Therefore, an issue of a possible recession would represent macroeconomic situation. Thus, the branch of economics represented by the headline "Lawmakers Worry About the Possibility of a US Recession" is macroeconomics.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.

Recession: Recession refers to the slowing down of economic activity characterized by falling output, prices and employment. A recession is preceded by boom and followed by recovery. It is a part of the business cycle: Boom ( Recession( Recovery( Boom.

To determine

(f)

The branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer".

Answer to Problem 4P

The branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer" is macroeconomics.

Explanation of Solution

Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc. If Pitcher is declared the highest paid ballplayer, it is a national level title given to him. Thus, the branch of economics represented by the headline "Los Angeles Dodgers Make Pitcher Highest Paid Ballplayer" is macroeconomics.

Economics Concept Introduction

Economics: Economics is a field of study that analyses the cost and benefit of actions by economic units such as households, firms, government, etc. This analysis regarding any action gives the optimal decision. Microeconomics: Microeconomics is the branch of economics that deals with the economic decision-making of micro units like consumers, firms, producers, labor, etc. The examples of microeconomic decisions are consumer choice, producer's choice, etc.

Macroeconomics: Macroeconomics is the branch of economics that deals with the economics of the aggregative variables like aggregate demand, aggregate supply, inflation, unemployment, etc.