Classify the following topics as relating to microeconomics

Classify the following topics as relating to microeconomics or macroeconomics. Topic The effect of rent control on the housing market The effect of an increase in income tax on national income Microeconomics Macroeconomics A firm\'s decision on which production method to use The effect of externality on the quantity produced by the market A student\'s decision about how to allocate his time between studying two subjects

Solution

Macroeconomics is the study of individuals and firms making decisions and the interaction among these individuals and firms.

Macroeconomics deals with performance, structure, decision making of an economy as a whole including regional, national, and global economy.

Therefore,

the effect of rent control on the housing market is microeconomics

The effect of an increase in income tax on national income is macroeconomics

A firm\'s decision on which production method to use is microeconomics

The effect of externality on the quantity produced by the market is microeconomics.

A student\'s decision about how to allocate his time between studying two subjects is microeconomics.