According to Colander, 2010 economics can be thought of as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society”. One way to think of economics is that it is studying how people buy things, what pushes them to make those choices, what resources are used, and what is the driving force behind those choices. In order to better understand consumer patterns it helps to have a better understanding of economics, more precisely, microeconomics. Microeconomics is “the study of individual choice, and how hat choice is influenced by economic forces” (Colander, 2010). This simply put means to consider the economy from a firm or individual’s point of view and then work the way up to an overview of the economy as a whole. The difference between micro and macro economics is that micro starts with small components and builds the theory, while macro looks at a theory and breaks it down by component to examine. This is how we can determine patterns and trends set by consumption, and even though the two are related, there is really no clearly drawn line as to how different they really are. This can be clarified by looking at the law of supply and demand. The law of supply can be defined as “quantity supplied rises as price rises, other…
Compare and contrast microeconomics and macroeconomics. How do the two approaches interrelate? Use a specific example to explain.…
Macroeconomics is the study of a country's overall economic issues such as performance, structure, behavior, decision making, and study rates. Microeconomics focuses on smaller economic units such as individual consumers, families and businesses. They can affect how much and what you can buy for your family.…
The economy is divided into two categories microeconomics and macroeconomics. Microeconomics refers to the study of individual’s behavior within the economy. It concentrates on factors that influence the individual’s economic choices based on economic forces. The study of individual’s behavior when it comes to supply and demand is an important element to microeconomics. The law of demand says that the quantity demanded increases as the price falls or decreases as the price rises. An individual can have many wants, but it is restricted by their ability to pay for the goods. The law of supply says that as the quantity of supply rises as the price rises and falls as the price falls. Macroeconomics studies the economy as a whole. It mainly deals with issues with inflation, unemployment, business cycles and growth.…
Macroeconomics examines either the economy as a whole or its basic subdivisions, such as the government, household, and business sectors. Macroeconomics seek to obtain an overview or general outline of the structure of the economy relationship of its major aggregates. We can see it as an economic measure of total output, total employment, total income, aggregate expenditure, and the general level of prices in analyzing various economic problems. On the other hand microeconomics is the part of economics concerned with individual units such as a person, a firm, or industry. At this level economist observe the detail of an economic unit, or very small segment of the economy. Micro measures the price of a specific product, the number of employees in a small business, the revenue of a particular…
According to Investopedia “The field of economics is broken down into two distinct areas of study: microeconomics and macroeconomics. Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it. People who have any desire to start their own business or who want to learn the rationale behind the pricing of particular products and services would be more interested in this area. Macroeconomics, on the other hand, looks at the big picture (hence "macro"). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world.”…
A. macroeconomics is the study of individual markets, while microeconomics deals with the nation's economy as a whole.…
Microeconomics is the study of decision making undertaken by individuals (households) and by business firms. Micro looks at the decisions of individual’s actions, like deciding to work overtime or not. Another example is a small business decision on how much to spend of advertising cost. Micro focuses on the supply and demand in an economy, and how businesses can maximize profits. Macroeconomics is the study of the behavior of the economy as a whole. Macro deals with national items like the unemployment rate, government budget deficit, and money supplied by the…
Macroeconomics is the study of the economy as a whole. It considers problems of inflation, unemployment, business cycle and growth.…
Macroeconomics deals with the study of the economy as a whole, rather than that of individual markets. It takes into consideration how the variances and changes in prices, wages, policies, expectations, etc. throughout the economy influence the supply and demand of the economy in its entirety. There are many facets and many different aspects of the economy and the factors that influence it. The gross domestic product (GDP) is the market value of all the officially recognized goods and services produced within a country at a given point in time.…
On the other hand, microeconomics is the decisions that are made on a smaller scale based on the factors that result in such decisions and how others are affected by those decisions. These decisions are made by individuals and groups such as a household for example (Moffatt, M., n.d).…
Its goal is to explain the economic changes that affect many households, firms, and markets at once.…
Macroeconomics is a term that is widely known but can be very intimidating when trying to become versed in this subject. There are several terms and concepts that need to be learned in order to begin to grasp the complexity of this topic. Massive layoffs of employees, decreases in taxes and the purchasing of groceries have many effects on the economy. In fact these economic activities contribute to the fluctuations in the economy. These economic activities cause fluctuations in the economy which affect government, households, and businesses.…
C. examines the choices made by individual participants in an economy, while macroeconomics considers the economy's overall performance…
There are many economic activities that have an apparent affect on businesses, households, and the government. Some of these various financial affairs include tax reductions, vast employee layoffs, and purchasing groceries. For each activity there is a flow of resources that go from one entity to another. Although it may seem as if these activities are not directly related, in many ways they can have an affect on each other as well as on each entity. Acknowledging the influence an economic activity can have on a community can be beneficial for an individual, family, business, or political authority,…