Aspects of microeconomics and macroeconomics

The price in equilibrium is determined by supply and demand.

Macroeconomic Factor

Extensive study goes into establishing the appropriate interest rates in an economy, where the government sets a base rate and banks work from there. Your mother, thus every month, undertakes budgeting or allocation of resource exercise in order meet various household requirement with the limited means that she holds in such a way, that such allocation of resources leads to maximisation of benefits or gains for the individual household.

Microeconomics focuses on Aspects of microeconomics and macroeconomics that affect individuals and companies. Not all macroeconomic factors are negative; some promote economic growth. It attempts to measure social welfare by examining the economic activities of the individuals that comprise society.

The limitations of Microeconomics are as follows: According to theory, this may give a comparative advantage in production of goods that make more intensive use of the relatively more abundant, thus relatively cheaper, input.

What's the difference between microeconomics and macroeconomics?

An example of a microeconomic issue could be the effects of raising wages within a business. If you are interested in learning more about economics, take a look at What is "marginalism" in microeconomics and why is it important?

Environmental scientist sampling water Some specialized fields of economics deal in market failure more than others. In addition to factors like supply and demand, opportunity cost is one of the principles of microeconomics.

The Study of Microeconomics assists in Demand Forecasting. However there are certain shortcomings of the Microeconomic theory as well. Macroeconomic theory explains and deals with the economic environment which an individuals firms, industry, household etc face or encounter.

If there is an overabundance of supply for a specific product, the price will naturally be driven down assuming demand for that product stays constant. Results Economics is thus a social science which studies human behaviour when an individual is encountered with unlimited desires but holds limited means to satisfy them.

In order to manage the risk and uncertainity associted with the earnings flow, the Infosys Technologies can use hedging techniques. So Microeconomics looks at all the small economic decisions and interactions that all add up to the big picture concepts that Macroeconomics looks at.

The field of study is vast; so here is a brief summary of what each covers. Positive Macroeconomic Factors Positive macroeconomic factors include events that lead to prosperity within a nation or multiple nations.

In reality, all of the factors are constantly shifting and enacting macroeconomic policy is very difficult to manage. Then the impact of the policy decisions of other countries have to be considered also as they impact what happens to a countries economy also.

For whom to produce? Thus, whenever the price increases the demand for the good decreases and whenever the price decreases the demand for the good increases - provided other things remain constant or Ceteris Paribus.

A term for this is "constrained utility maximization" with income and wealth as the constraints on demand.

The Difference Between Micro and Macro Economics

This has led to investigation of economies of scale and agglomeration to explain specialization in similar but differentiated product lines, to the overall benefit of respective trading parties or regions.

In reality, all of the factors are constantly shifting and enacting macroeconomic policy is very difficult to manage. For example, a common focus of macroeconomics is inflation and the cost of living for a specific economy. Again, this assumption of ceteris paribus, is unrealistic in the real markets.

On the other hand, Macroeconomics studies the economic behavior of firms, industries, household consumers etc at an aggregate level. Each point on the curve shows potential total output for the economy, which is the maximum feasible output of one good, given a feasible output quantity of the other good.

The Difference Between Micro and Macro Economics

Microeconomics studies individual markets by simplifying the economic system by assuming that activity in the market being analysed does not affect other markets. Producers, for example business firms, are hypothesized to be profit maximizers, meaning that they attempt to produce and supply the amount of goods that will bring them the highest profit.

Similarly, microeconomic theory of demand,supply etc helps in understanding the exchange rate determination process in the foreign exchange market. As already discussed, most of the clients of Infosys Technologies are located overseas and thus the earnings of the company are in terms of foreign currencies like US Dollars USDEuros etc.Studying and applying macroeconomics is incredibly important at the government level as the policy and economic decision and regulations enacted by government can have a major impact on many aspects of the overall economy.

Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behaviour, individual labour markets, and the theory of firms.

Macro economics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand. Microeconomics stands in contrast to macroeconomics, which involves "the sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national policies relating to these issues".

Economics (/ ɛ k ə ˈ n ɒ m ɪ k s, iː k ə-/) is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes basic elements in the economy, including individual agents.

May 19,  · The difference between micro and macro economics is simple. Microeconomics is the study of economics at an individual, group or company level. Macroeconomics, on the other hand, is the study of a national economy as a Nick Gibson. Economics is traditionally divided into two parts: microeconomics and macroeconomics.

The main purpose of this course is to introduce you to the principles of macroeconomics. Macroeconomics is the study of how a country's economy works while trying to discern among good, better, and best choices for.

Aspects of microeconomics and macroeconomics
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