Describe the job of a microeconomist in the corporate world. Also, describe the job of a microeconomist as a designer of public policy.
Your Answer:
In the first case, a microeconomist
studies the supply and demand conditions of the market in which the corporation
does business.
On the supply side, the economist studies both the firm itself
and the industry in which the firm operates. Among other issues, the economist
studies the nature and direction of competition, cost and production methods,
as well as price and profit strategies and expectations.
On the demand side,
the economist studies the determinants of demand for such as the number of
buyers, their income, tastes and preferences, their expectations, as well as
the price of related goods, both substitutes and complements. Consumer behavior
and responsiveness to price changes are also key aspects of microeconomic
analysis.
As a designer of public
policy, a microeconomist studies policy choices and their effect on consumers,
businesses and market prices and output levels.
The economist studies benefits
and costs associated with government policies, and is concerned with the
efficiency, fairness, and equity results of such policies.
The microeconomist
also helps to determine the optimal level of an activity such as the production
or consumption of a good or service. The economist lists and studies options
and presents information that can be used by policymakers to make more informed
policy decisions.
Source: Pindyck /
Rubinfeld, Microeconomics, 7th edition, Pearson
So in other words, a microeconomist's job is to help make corporate decision in order for certain groups of individuals or corporates to compete and hopefully gain competitive advantages over their competitions?
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