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| + | ====== Microeconomic Variables ====== | ||
| + | Microeconomic variables are factors or conditions that can change over the course of time, and can be used to describe or predict the behavior of individual economic units of study, like a business or a person. | ||
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| + | ===== Examples of Microeconomic Variables ===== | ||
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| + | * Price | ||
| + | * Quantity traded | ||
| + | * Expenditure | ||
| + | * Wage level | ||
| + | * Price of inputs | ||
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| + | ===== Variables in Microeconomic Models ===== | ||
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| + | Microeconomic models can include variables that are defined outside the model, like the interest rate, that is set by macroeconomic forces, or the institutional arrangement. Microeconomic models do not try to explain the behaviour of these variables inside the model, they are considered set outside the model. | ||
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| + | But microeconomic models can be used to predict the effect on the change of those external variables. For example, a microeconomic model could be used to predict the effects on consumer surplus when the tax level is raised or when an antitrust law is passed. | ||
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| + | See also: [[en:microeconomics-definition|Microeconomics Definition]] | ||