![]() ![]() Microeconomics analyzes how individuals and households spend their income? How do people decide what amount to save for future contingencies? What set of goods and services best fulfils their needs and wants, in the limited income? Here, the demand plays a key role in determining the quantity and the price of a product along with the price and quantity of related goods (complementary goods) and substitute products, so as to make a judicious decision regarding the allocation of scarce resources, concerning their alternative uses. It ascertains how the limited resources are allocated among various individuals to satisfy their wants? As well as it specifies the conditions for the best possible utilization of the resources, in order to attain maximum output and social welfare. ![]() Microeconomics is the branch of economics that concentrates on the behaviour and performance of the individual economic agents within the economy such as consumers, family, industry, firms, etc. It has been analyzed that 'Fallacy of Composition' involves, which sometimes doesn't proves true because it is possible that what is true for aggregate may not be true for individuals too. ![]() In microeconomics it is assumed that there is a full employment in the society which is not at all possible. It is based on unrealistic assumptions, i.e. Maintains stability in the general price level and resolves the major problems of the economy like inflation, deflation, reflation, unemployment and poverty as a whole. Helpful in determining the prices of a product along with the prices of factors of production (land, labor, capital, entrepreneur etc.) within the economy. Theory of National Income, Aggregate Consumption, Theory of General Price Level, Economic Growth.Ĭovers various issues like demand, supply, product pricing, factor pricing, production, consumption, economic welfare, etc.Ĭovers various issues like, national income, general price level, distribution, employment, money etc. Theory of Product Pricing, Theory of Factor Pricing, Theory of Economic Welfare. It assumes that all micro-economic variables are constant. It assumes that all macro-economic variables are constant. The branch of economics that studies the behavior of the whole economy, (both national and international) is known as Macroeconomics.Īpplied to operational or internal issues The branch of economics that studies the behavior of an individual consumer, firm, family is known as Microeconomics. Contents: Micro Economics Vs Macro Economics Here, in the given article we’ve broken down the concept and all the important differences between microeconomics and macroeconomics, in tabular form, have a look. There are two broad categories into which Economics is classified, i.e. Economics has been divided into two broad parts i.e. ‘Economics’ is defined as the study of how humans work together to convert limited resources into goods and services to satisfy their wants (unlimited) and how they distribute the same among themselves. ![]()
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