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    Assignment 1.1

    Uploaded by

    Heina Lyllan
    The document provides responses to questions about microeconomic and macroeconomic perspectives on the economy, the importance of input and output prices to managers, the four major types of markets in microeconomic analysis (perfect competition, pure monopoly, oligopoly, and monopolistic competition), and whether a monopolist can set price as high as they want. It also provides bonus responses about the five categories that make up GDP and the differences between fiscal and monetary policies.

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    Assignment 1.1

    Uploaded by

    Heina Lyllan
    108 views2 pages
    The document provides responses to questions about microeconomic and macroeconomic perspectives on the economy, the importance of input and output prices to managers, the four major types of markets in microeconomic analysis (perfect competition, pure monopoly, oligopoly, and monopolistic competition), and whether a monopolist can set price as high as they want. It also provides bonus responses about the five categories that make up GDP and the differences between fiscal and monetary policies.

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    The document provides responses to questions about microeconomic and macroeconomic perspectives on the economy, the importance of input and output prices to managers, the four major types of markets in microeconomic analysis (perfect competition, pure monopoly, oligopoly, and monopolistic competition), and whether a monopolist can set price as high as they want. It also provides bonus responses about the five categories that make up GDP and the differences between fiscal and monetary policies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    108 views2 pages

    Assignment 1.1

    Uploaded by

    Heina Lyllan
    The document provides responses to questions about microeconomic and macroeconomic perspectives on the economy, the importance of input and output prices to managers, the four major types of markets in microeconomic analysis (perfect competition, pure monopoly, oligopoly, and monopolistic competition), and whether a monopolist can set price as high as they want. It also provides bonus responses about the five categories that make up GDP and the differences between fiscal and monetary policies.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    BADURIA, Heina Lyllan P.

    2CLM

    1. What are the differences between the microeconomic and macroeconomic perspectives
    on the economy?

    Microeconomics focuses on the individual industries and business decisions, supply


    and demand as well as determining price levels whilst macroeconomics focuses on
    studying the decisions of the countries and its government to its economic pursuits.

    2. Why are both input and output prices important to managers?

    Output prices influence the profits a firm obtains from the selling of its production,
    while input prices gives influence to a business’ costs of producing its products. The
    difference between a firm’s overall profit and overall costs is the determine its profit.

    3. What are the four major types of markets in microeconomic analysis? What are the key
    characteristics that distinguish these markets?

    1. Perfect Competition: A very large number of firms sell to a very large number of
    consumers wherein firms make the same goods and consumers have perfect knowledge
    of its prices and the quantities.

    2. Pure Monopoly: It is where only one firm is selling in a market and production
    being done in low quantities at higher costs.

    3. Oligopoly: Markets where there are only a few competitors, although oligopolies


    would opt to produce more than monopolies.

    4. Monopolistic Competition: In this type of market, firms produce different


    products from each other of which they start of monopolistic and turn to competitive
    firms in the long run, continually investing in their products to remain atop the market.

    4. Since a monopolist has some degree of market power and can also take measures to keep
    competitors away from the market, a monopolist can set the price of their product as high as
    they want. The higher the price charged, the higher the revenue. Do you agree? Explain your
    answer.

    No, not necessarily. Consumers would have to pay higher prices and fewer
    consumers can afford to buy. This also leads to allocative inefficiency because the price
    is greater than marginal cost. Fewer consumers would, using common sense and logc,
    less revenue for there would be less people who’d buy the good.
    Bonus:

    1. In macroeconomics, what are the five major categories of spending that make up GDP?
    Are all five categories added together to determine GDP?

     Consumption spending
     Investment spending
     Government spending
     Export spending
     Import spending

    These are all components to the formula to calculate GDP such that Consumption spending
    + Investment spending + Government spending + Export spending are added together, its
    sum then being subtracted to the Import spending to get the GDP.

    2. Discuss the differences between fiscal and monetary policies.

    Monetary policy gives reference to the activities of central banks to attain


    macroeconomic policy objectives such as balancing of prices in the market, employment,
    and the overall stable economic growth. Fiscal policy denotes to the taxation and
    spending policies of the government.

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