1. Your local Milk Bar has created a new improved version of the thick shake, and priced it below the McDonald's thick shake – is it operating in the microeconomic environment, the macroeconomic environment, or both? Explain your argument.
2. The Australian government is considering a decrease in the rate of personal taxation – is it operating in the microeconomic environment, the macroeconomic environment, or both? Explain your argument.

Your local Milk Bar has created a new improved version of the thick shake, and priced it below the McDonald's thick shake – is it operating in the microeconomic environment, the macroeconomic environment, or both? Explain your argument.

In the case of the local Milk Bar setting cost of an improved thick shake lower than the competing McDonald thick shake, the local Milk Bar is operating in both microeconomic and macroeconomic environment of the business. Development of the improved version of the thick shake is performed entirely using firm's own resources and the price is set using the resources and financial capabilities of the company. This aspect of the business indicates the microeconomic environment of this operation by the local Milk Bar (Snowdon & Stonehouse, 2006). However, the local Milk Bar has used the microeconomic operation of the company to place itself in a strategically beneficial position compared to the rival McDonald's thick shake product. In this manner, the local Milk Bar has used its microeconomic operation as a way of influencing and impacting the macroeconomic environment of the company.

The Australian government is considering a decrease in the rate of personal taxation – is it operating in the microeconomic environment, the macroeconomic environment, or both? Explain your argument.

In an economy, macroeconomic environment refers to the aspects and study of the industry as a whole or the whole economy rather than focusing on an individual person or organisation (Athanasoglou, et al., 2008). Whether or not the Australian government decides to reduce the rate of personal taxation, it is a decision-making process that impacts the whole economy of Australia as a whole as the new taxation policy will have implications for everyone eligible individual in Australia. From this perspective, it is clear that this decision-making process for taxation policy is an operation in a macroeconomic environment (Tucker, 2008). In this entire process, the focus or implications of the policy are never on limited specific individuals or organisations. As the orientation of a change in personal taxation, links to all individuals, the macroeconomic environment is getting impacted.

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