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Macroeconomics 12th Edition by Michael Parkin
Edition 12ISBN: 978-0133872279Macroeconomics 12th Edition by Michael Parkin
Edition 12ISBN: 978-0133872279 Exercise 1
Apple Inc. decides to make iTunes freely available in unlimited quantities.
a. Does Apple's decision change the incentives that people face
b. Is Apple's decision an example of a microeconomic or a macroeconomic issue
a. Does Apple's decision change the incentives that people face
b. Is Apple's decision an example of a microeconomic or a macroeconomic issue
Explanation
Verified
Verified
Economics is a study of choices made by the people to cope with the scarcity.
(a)
Apple Inc decision to make iTunes freely available in unlimited quantities induces the demand for the Apple products. This decision changes the incentives of people, as it is the buyer's self-interest to purchase the product.
For example: Consumers incentive to buy an i-pod increases due to the free music available on it.
(b)
Apple's decision is a micro economic issue because it effects an individual firm and an individual market. The decision made by the company does not affect the entire economy.
(a)
Apple Inc decision to make iTunes freely available in unlimited quantities induces the demand for the Apple products. This decision changes the incentives of people, as it is the buyer's self-interest to purchase the product.
For example: Consumers incentive to buy an i-pod increases due to the free music available on it.
(b)
Apple's decision is a micro economic issue because it effects an individual firm and an individual market. The decision made by the company does not affect the entire economy.
Macroeconomics 12th Edition by Michael Parkin
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