Concepts Of Micro Economics And Macro Economics

By Anonymous -

Welcome To You

I heartfully welcome you to read about Micro economics and Macro economics. Share your thoughts as they're very powerful.

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Economics

In previous posts, it already said that Economics is broadly categorised into 2 types or branches. Micro and Macro economics.

One can say simply that micro economics is everything about Prices, Consumer behaviour, firms, households, each decisions, Individuals, etc.

It mainly deals with prices and markets.

Whereas, Macro economics is also another branch of economics which studies about all aspects of an economy as a whole or single unit. It studies overall performance, problems of economy, growth etc. It is based on 2 main perspectives. that is long-term and short-term analysis.


Micro economics is developed by classical economists such as Adam Smith, Jean-Baptiste Say, David Ricardo, Marshall, Thomas Robert Malthus, John Stuart Mill, etc.


Introduction of the terms

Ragnar Frisch was the first economist to use the new words like micro and macro Economics in economic theory (1930). He also used many new words like Econometrics 


Micro and macro economics are inter related to each other. 


Micro Economics

  • The word Micro is derived from Greek words "Micros" which means small.
  • Micro economics is the study of individual units of an economy. 
  • It is known as price theory. 
  • Micro economics explains price determination of both commodities and factor market. 
  • Micro economics is based on price mechanism which depends on demand and supply. 
  • It deals with Individual and economic issues.


Macro economics

  • The word Macro is derived from Greek words "macros" which means large. 
  • Macro economics is the study of economy as a whole. 
  • It is known as income and economic theory. 
  • Macro economics deals with the national income, total employment, general price level, etcetera. 
  • Macro economics is based on aggregate demand and aggregate supply. 

Simple

If the collected data refers to only a particular unit, Then it is called as a Micro economics or Micro analysis. 

Whereas, if the collected data refers to general or a whole unit, it can be called as a macro economics or macro analysis.


In micro economics, Mostly economists use assumptions to explain theories because it is very easy to solve and explain the problem by breakdown and simplifying the complex ones. It is useful to analyse theories clearly. It is useful to understand choices, using resources and behaviour of individuals.

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The End


Thanks for reading. Hope it is helpful to you.


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