6. Microeconomics and macroeconomics Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics.
a. The effect of a cigarette tax on the quantity of cigarettes sold
b. The effect of a large government budget deficit on the economy's price level
c. The optimal interest rate for the Federal Reserve to target

Microeconomics

Macroeconomics

Macroeconomics

Explanation:

Microeconomics studies how individuals and firms make decisions in allocating scarce resources.

Some of the topics studied in microeconomics are :

marginal utility

Demand and supply

Elasticity of demand and supply

Market structures

Macroeconomics studies the economy as a whole.

Macroeconomics concepts include:

national income

gross domestic product (GDP)

inflation

unemployment

The effect of a cigarette tax on the quantity of cigarettes sold studies the microeconomic concept of demand and supply.

The effect of a large government budget deficit on the economy's price level and the optimal interest rate for the Federal Reserve to target studies macroeconomics concepts

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