Should Microeconomics Be Shorter?

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Recommended: Principles of microeconomics key concepts

Microeconomics is the study of the choices made by households, firms and government and how these choices affect the markets of goods and services (O'Sullivan, Sheffrin & Perez, 2014). Studying microeconomics can provide a better understanding of how markets work and how to predict various events that affect the prices and quantities of products in that market. For example: How would an increase in the tax on alcohol affect the number of deaths of young adults on the highway from drunk driving? Research can be used to show that the number of highway deaths of young adults is general proportional to the total amount of alcohol consumed by that group. An increase in the tax on alcohol would make the products more expensive, which would mean that less alcohol will be consumed by young adults. If the new tax on alcohol helped to decrease the amount of alcohol consumed by any percentage, the number of highway deaths by …show more content…

Microeconomics can be used to explore the tradeoffs associated with various public policies. For example: prescription drugs are protected by government patents that give the developer the exclusive right to sell a new drug for a fixed period of time. However, when the patent expires, other pharmaceutical companies will be able to produce and sell generic versions of the drug, which will cause the prices of the prescriptions to drop significantly. Should drug patents be shorter? A shorter patent time would have tradeoffs. The good side would be that the generic versions of the drug would be available sooner, which would cause prices to drop sooner and help more people sooner. The bad side would be that the financial pay off for the pharmaceutical companies that developed the new drug would be smaller, which could cause drug companies to not develop as many new drugs (O'Sullivan, Sheffrin & Perez,

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