Which of the following is an example of microeconomics?

• A. Measuring the inflation rate for an entire country
• B. Studying the causes of national unemployment rates
• C. Analyzing how a consumer decides between buying tea or coffee
• D. Examining the impact of fiscal policy on economic growth

Answer: (C)

Verified step by step guidance

1. Understand the distinction between microeconomics and macroeconomics: Microeconomics focuses on individual agents such as consumers, firms, and markets, while macroeconomics deals with aggregate economic variables like inflation, unemployment, and economic growth.
2. Identify the nature of each option: Measuring the inflation rate for an entire country and studying national unemployment rates are aggregate phenomena, which fall under macroeconomics.
3. Recognize that analyzing how a consumer decides between buying tea or coffee involves individual decision-making and consumer choice, which is the core focus of microeconomics.
4. Note that examining the impact of fiscal policy on economic growth involves government policy and overall economic performance, which is a macroeconomic topic.
5. Conclude that the example related to consumer choice (tea vs. coffee) is a microeconomic topic because it studies behavior at the individual level.