Micro is a prefix from the Greek word μικρός meaning small. Macro is the prefix meaning large, from the similar Greek word μάκρος, which means 'long'. Some examples include:
Microeconomics: focuses on the economic choices of individual actors (people, firms).
Macroeconomics: focuses on aggregate economics (countries, industries, etc.).
in macroeconomics manpower is related to growth and development of the country because of increased investment level(producers get attracted towards the huge market) and also increase in produce of the countrys outputs if converted to human capital else it would serve as a huge burden on the countrys demographic investment.In microeconomics increase in the members of the family or firm will lead to increase in output and also increase in income.
In micro-economics, need is characterized as what a person needs to survive. This can be food, water, shelter, etc. Wants are what people want, but don't necessarily need.
1) what to produce
2)how to produce
3)for Whome to produce
Not if you read your book.
microeconomics seeks to explain the working of individual prices, wages, particular industries.
merits of microeconomics:
1. formulating economics policies and scare resource of the country
2. achieve maximum output with minimum input.
Generally micro economics are of three types:
1) Micro static analysis
2) Comparative micro static analysis
3) Micro dynamic analysis
its a economics for decision making where we have to be very optimize and implement those situation which will be helpful in profit maximization in our businees effectively and efficiently since the micro economics explains the concepts like demnd,production ,supply analysis,so that it maximises the profit.
The term micro is derived from Greek word 'mikros' meaning 'small' and the term macro is derived from the Greek word 'makros' meaning 'large'.
Thus, Micro economics studies the economic behaviour of individual decision making units such as consumers, resource owners and business firms. It makes a microscopic study o the economy.
Whereas, Macro economics is concerned with the analysis of the behaviour of the whole economy. It deals with those aggregates which relate to the whole economy like total consumption, total investment, total savings, etc.
Microeconomics is the study of small part of the whole economy. It deals with particular firms, household, individual, prices wages, incomes, individuals, industries, particular commodities.
On the other hand the word Macro means large in scope, and explains the bigger picture, or universal.
Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on other forces that determine price levels for specific companies in specific industry sectors. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices and better compete in its industry.
Macroeconomics, on the other hand, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate.
While these two studies of economics appear to be different, they are actually interdependent and complement one another since there are many overlapping issues between the two fields. For example, increased inflation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product's price charged to the public.
The bottom line is that microeconomics takes a bottoms-up approach to analyzing the economy while macroeconomics takes a top-down approach. Regardless, both micro- and macroeconomics provide fundamental tools for any finance professional and should be studied together in order to fully understand how companies operate and earn revenues and thus, how an entire economy is managed and sustained.
Macro economics is the study of an entire national economy, or an international economy. It is what is usually meant by the term economics. Micro economics is the application of economic theory to a smaller economic system such as a single family or business.
Macro- and microeconomics, and their wide array of underlying concepts, have been the subject of a great deal of writings. The field of study is vast; here is a brief summary of what each covers:
Microeconomics considered how individual prices are set, studied the determination of prices of factors and inquired into the strength and weakness of the market systems.
The general law of diminishing returns partially accounts for the upward slope of supply curves for individual firms and for market supply curves. Additional production eventually becomes ever more costly as output levels grow. Thus, firms may require higher prices to justify expanding their outputs. Moreover, higher prices embody greater incentives for firms to produce more output because profit opportunities are enhanced. A similar logic applies for the economy as a whole.
Price ceiling is government rules or laws setting price floors or ceilings that forbid the adjustment of price to clear markets. Price ceilings make it illegal for sellers to charge more than a specific maximum price. ceilings may be introduced when a shortage of a commodity threatens to raise its price a lot.
Whereas CED can be either positive or negative. It all depends on the nature of the goods you're examining. Two types of goods that play an influencial role in determining CED of a good is Complementary goods and Substitute goods. Take for example, CED of substitute goods are always positve. This is because the quantity demanded for the substitute goods has a positive relationship with the price of the initial good, i.e when price of initial good drops, the quantity demanded for substitute goods will drop as well. This is because consumers will always opt for the cheaper alternative, which in this case is the initial good, thus quantity demanded for its substitutes will decrease.
No. Even a simple understanding of economics and price theory will prove this. No matter the firm's market power, price is always set by supply and demand. They can try and command a price on their own, but competitors will find a way to sell the same thing at a lower price. Supply and Demand always dictate price...even in gas prices contrary to what the media would have you believe. If Americans quit using so mus gas, the price would drop. But we keep buying it up and the demand rises during the summer. Since there is only a fixed amount of the product available for the world, this increased demand forces the price up ...because somewhere, somebody is willing to pay it. And if nobody is willing to pay it, they will lower the price to encourage it.
Now, what if the government forced them to lower the price. Suppose they set a limit at 2.00 cents a gallon. The result? There would never be enough gas to last. People would take the opportunity to fill up all their cars, their mowers, their gas cans, their boat...and then the guy who just needs a few gallons can't get any because everyone else bought it up due to an artificial price fix.
Supply and demand are the factors that affect price. Not anything else. It's NOT a company's "greedy" desire for profit. In fact, big oil companies make only about 12 cents on each gallon of gas...the government taxes each gallon nearly 20 cents...so do the math. If X oil company posts a profit of 12 billion dollars, the media goes nuts and everybody calls them greedy...but that means the government just got 20 billion in taxes off the same gas.
Instead of phony "price ceilings" let supply and demand have their way in the market.
managerial economics is micro in character as it help us to study economic behaviour of individual unit and also help us in decision making..
Inflation has a lot of impact on monetary unit assumption. Inflation greatly reduces the value of a monetary unit and acts as a hidden tax on consumers.
In general, anytime a free market is prohibited from setting prices in equilibrium, supply and demand will not match, and surpluses or shortages will occur.
In the case of a binding price ceiling, an upper limit is set on the price, below what the economy would naturally want. Thus, demand is higher than what is should be, and supply is lower - there is excess demand, or a shortage. This occurs in rent-controlled apartments in New York City, and also partially led to the disastrous winter at Valley Forge in the Revolutionary War. (Farmers were not willing to sell to the Continental Army at artificially low prices, and preferred to sell to the English instead.)
In the case of a binding price floor, the lower limit on price is above that clearing price, and supply exceeds demand, so there is a surplus. This is the case for many goods in the US farm industry, where the US government pays farmers not to plant to keep prices elevated, and used to buy large amounts of cheese and other agricultural products, for distribution to the needy or destruction.
In imperfect competition the producer is the price maker whereas in perfect the producer is the price taker. In imperfect no new competitors enter the industries hence super normal profits will continue to be realised, unlike in perfect comp
The laws of supply and demand
divinity of management
Before giving the answer of this question think simultaneously that, "why people buy both Insurance and lottery ticket?"
In layman microeconomics is analysis of the decision made by individuals or groups. It is understood that, any decision which is taken by any individual or group is not to be reluctant. Most probably the individual is sceptical in nature, study found that sometimes the group will also be sceptical. For instance, doctors are sceptical to prescribe about the value of alternative medicine. Therefore these sceptical nature of individual create confusion in decision in his business that's why individual or group learn all strategy of microeconomics to maximize profit by firms and maximizing consumer utility.
NOTE:- It is certainly true that whole economy is made up of individuals consumers and business.
NOTE:- Microeconomics extend to such issue as how voters choose between political parties and how Government should set taxes.
Microeconomics is that branch of economics analysis which studies the economics actions and behavior of individual units such as individual customer individual firms etc ; on the other hand macroeconomics deals with the economics actions and behavior of not a single particular unit - but the whole concept combined together.
Ridge in microeconomics
Managerial economics, also called business economics, is a subset of macroeconomics.
Managerial or "business economics" applies the ideas, mostly from micro-theory, but some from macro-theory as well, specifically to the business world. Many ideas are similar to microeconomics.
Managerial economics developed analytical tools for examining business decisions with much more specificity and granularity. It's not a general problem being solved; it's often a real-world problem of a real firm: for example, what combination of products at what price and what level of production would maximize the profits of a specific firm. Managerial economics provides an extensive set of statistical modeling, econometric modeling, applied theories and systems to address real-world decision-making in the business firmMicroeconomicsMicroeconomics focuses on how small firms and individuals make decisions about resources, services and goods. This aspect of economy studies how behaviors and decisions affect supply and demand, price setting, sales, profit and revenue. Microeconomics asks the question: "How do people deal with their money, their time and their resources?" The analysis of market failure and competition is also discussed within microeconomics.
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