TABLE OF CONTENT
Q i) Opportunity cost
Q ii) Vital signs of the economy
Q iii) Macroeconomic (MAC) and
Opportunity cost analysis is an important part of a decision-making processes for an economy.
The behavior an economy can be studied at two levels, Macroeconomic and Microeconomic.
i) Opportunity cost
Opportunity cost is the cost of passing up the next best choice when making a decision. In order to get higher qualification for my career path, the opportunity cost of my course is my time and money. I can travel with time and money reserved for study. Even I can get a part time job to earn more money or I can spend time in gathering with family and friend.
ii) Vital signs of the economy
Economists would consider government policy, inflation, employment, pace of economic growth in certain period of time such as past ten years and living standard of people as the “vital signs” of the economy.
iii) MAC & MIC
Macroeconomic is the study of the behavior an economy at the aggregate level and
Microeconomic is the study of the behavior of small economic units. Factors included:
Macroeconomic (MAC) Microeconomic (MIC)
(a) Gross domestic product (b) The demand for beer
(c) Inflation (d) The price of gold relative to the price of silver
(g) Economic growth (e) Unemployment among economics professors
(h) Stagflation (f) Wages in regulated public utilities
(k) Recession (i) Price of medical care
(m) Total employment (j) Job discrimination
(o) National income (l) Apartment rents
(p) Business cycles (n) A household’s income
(q) The government budget deficit (r) The money supply
In the economy, we should allocate well the supply and demand of scarce resources in the global environment. So, we have to understand the economy situation and business problem by MAC and MIC.