The analytical tools underlying nearly all microeconomic studies are:
A) Unconstrained optimization and comparative statics.
B) Comparative statics and game theory.
C) Opportunity cost and equilibrium analysis.
D) Constrained optimization, equilibrium analysis, and comparative statics.

Question

Quizplus · Accepted Answer

Constrained optimization, equilibrium analysis, and comparative statics are the three analytical tools that underlie nearly all microeconomic studies. Constrained optimization involves finding the best solution to a problem subject to certain constraints. Equilibrium analysis involves analyzing the behavior of agents in a market or economy where supply and demand are in balance. Comparative statics involves comparing the behavior of agents in response to changes in exogenous variables. These three tools are essential for analyzing microeconomic phenomena such as market outcomes, consumer behavior, producer behavior, and market failures.

The Analytical Tools Underlying Nearly All Microeconomic Studies Are