Tag: business economics and quantitative methods

Microeconomics deals with the study of individual variables like firms, workers, consumers, and investors on how they interact with each other and influence various factors in the market like price of a commodity. 

Microeconomics deals with the individual or a small unit's influence in the economic problems that prevails in the nation it is not bothered about the macro units that is the nation as a whole. Therefore at the time of estimation of micro variables of the economics, macro is assumed to be constant.

Macro economics studies economics as a whole and not from the view point of an individual unit. General price level is related to the prices of most of the commodity in a nation at a certain period of time and thus it is a macro variable.

Macro economics deals with the national income of a nation and what are its implications on various factors of the nation economically as well as socially which lead to growth and development of the economy.  

Micro economics studies economics from the point of an individual unit. Price theory is included in micro economics. Price theory determines that how demand and supply forces determine the price of goods and services in a market.

Macro economics deals in the study of economics as a whole. Aggregate supply, (that refers to total production of goods and services in the economy) national income (income incurred by a nation from the production of goods and services during an accounting period) and aggregate demand (total expenditure on the purchase of goods and services in an economy during an accounting year) - all are included in the study of macro economics.

Macroeconomics is also called Income theory as it studies the relative levels of income, output, employment, and prices in an economy. 

The income theory is a major aspect of macroeconomics theory. A major task of macroeconomics is the determination of national income. Macroeconomics studies the factors determining national income and the causes of the trends in national income.     

The main branch of micro economics deals with the change in price of a commodity due to various market forces like quantity demanded and quantity supplied of that commodity in the market. 

Consumer behaviour is a micro unit as it measures the behaviour of each consumer when they purchase the commodity which developed many theories like utility analysis, indifference curve analysis etc. 

Price fixation by producer firm is a micro variable as it is a individual firm who is deciding the price of the commodity.