A microeconomic model CANNOT be used to
A) evaluate the impact of a price change on a firm's revenue.
B) predict the impact of an increase in the minimum wage on unemployment.
C) evaluate the fairness of a proposal to nationalize health insurance.
D) evaluate the effect of an increase in stadium size on the price of a sport team's tickets.

Question

Quizplus · Accepted Answer

Microeconomic models are used to analyze the behavior of individuals, firms, and markets. They are not designed to evaluate proposals relating to national policies or evaluate fairness. Therefore, Microeconomic models cannot be used to evaluate the fairness of a proposal to nationalize health insurance.

A Microeconomic Model CANNOT Be Used to