write an essay on micro and macro economics?
Answers
Microeconomics and macroeconomics are two very distinct terms in economics. In microeconomics, we get to understand the various activities by the various players in an economy. It concentrates in analyzing how parties spend on various resources. It also takes into consideration the driving forces in making any decision towards utilization of the resources with the aim to satisfy human wants. Human wants have different characteristics in their individual unique nature. Macro economics views the whole picture in the economy without keen concentration specific individuals (Amitava Krishna Dutt, 2003, p. 100).
Difference between microeconomics and macroeconomics
Micro economics is about economic situations pertaining to an individual. Macro economics is more concerned with the whole economy. Microeconomics economics is generally with prices as their main concern. Its important to note that ideals situations in microeconomics may not rhyme with the general economy (macroeconomics). Mean while microeconomics and macroeconomics are relatively interlinked. For micro economics, the ease of supplying goods and services depends on the general investment and activities in the whole economy.
Meanwhile the total performance of macro economics is a subject of the total activities that take place in micro economics (Farmer, 1999, p. 200).
Economic agents are players in economics who make decisions on how much to spend on an item or whether the need needs any attention at all.
Basic concepts on microeconomics and macro economics
All goods produced by an economy equals to consumption of the house holds. This is an assumption that nothing produced by the economy is the same with what the households require.
A story is told of a boy who was taking some time to rest when an unexpected visitor showed up, a mouse. The mouse had different wants and needs which mutated as the day progressed. The boy felt companionate about the lone traveler and he generously gave him a cookie. On receiving the cookie, the mouse developed a new want, he asked the boy to assist him with milk so that he could be comfortable taking the cookie offered to him by the boy. The boy is kind enough and gives the rat some milk. Once it was done taking milk it asked the boy if he could avail a mirror so that it could check if there was any milk mustache. Once he looked into the mirror he was shocked at the size of his hair. He needed a shave so he requested the boy to avail pair of scissors. Once the boy trimmed the mouse hair, the house was littered with hair. He needed to look for a broom and clean up the place. This story is an appropriate background to base our argument on characteristics of microeconomics and macro economics. We shall be in a position to understand the nature of human wants, what it takes to satisfy them and the various challenges involved. We also get to analyze the various strains that befall the economy as a whole (TR Jain, 2010, p. 67).
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Essay on Micro and Macro Economics is given below:-
Explanation:
- Micro means small so, it is the of study of economic actions of individual and small groups of individuals.
- Examples of micro economics are Individual demand,price of commodity.
- Its major concern with households,firms and industries.
- Macro means large so, it is the study of the behavior of not only particular firm or industry but whole economy
- Its major concern is how unemployment,price level,growth rate affect as the Gross national product(GNP).
- Example of Macro economics are Aggregate demand, Aggregate Supply.
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