Does this statement relate to Microeconomics or Macroeconomics?

Question

"Unexpected cold weather in central Florida reduced the production of citrus fruits and caused the prices of oranges to rise"

I can think of reasons why it could be either........help!!

Answer 1

It is a macroeconomic factor of weather affecting production and thus the production and supply chain, which in turn affects the supply-demand relationship, affecting the customer at the microeconomic level. A good example of how they are closely interrelated. So, instead of thinking in binary terms, think globally.

Realise that the increased prices suppress purchase and thus the demand and in turn affect the margins of all involved right upto the orchard owners. So, the feed-back is from micro to macro level. If this situation continues for more than a few years, the orchard owners may be forced to switch to other uses of their land. On the other hand, better weather conditions and better yields can encourage exports of oranges from other places to the local market. The imported oranges will compete with the local produce and the prices will tend to stabilise.

Similarly when the crop is plenty, oranges may be exported to other markets. Thus macroeconomics tend to level out the differences at the micro level.

Answer 2

Micro- it relates to one industry

Answer 3

Micro, it is one product and one geographic area and one industry.