Answer to Question #104330 in Microeconomics for Nondumiso

Question

Why do we consider the total production and export of maize as a microeconomic issue?

Answer 1

Microeconomic refers to the study of firms, households, and individuals’ behavior in making decisions and allocating resources. It applies generally to goods and services markets which deals with economic and individual issues. A microeconomic issue is therefore an issue which focuses on individual agents’ actions within an economy such as businesses, individuals, and households.

The total production and the export of maize is determined by individuals, households, and firms. The amount of maize produced in an economy as well as the amount exported is based on the behavior of the individuals’ agents in the economy. The individual agents allocate resources and make decision on the production as well as on export. Therefore, the production and export of maize is considered as a microeconomic issue since, the individual agents’ decisions affects the price, demand, and supply.