Introduction to Micro Economics and Macro Economics.

Economics 

Q1) What is Economics?

Economics is a branch of social science in which we study the economic behaviour of a customers, producer,firm and nations.In economics we have two basic problems:-

1) Limited resources

2) Unlimited Wants

 So we have to make a choice among unlimited wants with limited resources.,In economics we study how individuals and nations take decisions and make choices among unlimited wants with limited resources and get maximum satisfaction.

"Economics is the study of finding solutions of making choice between unlimited wants with limited resources."

Study of finding solutions is perform in two categories:-

1) Micro Economics

2) Macro Economics 

1) Micro Economics - When we study the economic behaviour of individuals like Customer,Producer,firm , company that is Micro Economics.Micro economics is the study of small unit .In this we study how the individuals make choices of wants among unlimited wants and satisfied with limited resources so that they can get maximum satisfaction.In Micro Economics we study the demand, supply of particular individual.Micro economic's basic tool is price because all the decisions are taken by taken price in a consideration for eg consumer demand more good if the price is less and less goods if price is high.In the way producer also take price in consideration and make choice for eg if price of product is high producer supply more goods and if price is low producer supply less goods .Thus price is the basic phenomenon of Micro Economics.

Micro Economics 

2) Macro Economics - When we study Economic behaviour of whole country or nations that is macro economics.In this we study how government make choices among unlimited wants of people with limited resources because Government revenue is limited but people wants are unlimited .In this we study the national income, Employment level , Production level, Standard of living, general price level.national savings etc.

Macro Economics 

Macro economics basic tool is income because all the decisions are taken on the basis of income .It means income is the basic phenomenon of macro economics.In macro economics level of employment,level of standard of living, level of savings all are based on income . Government choose option on the basis of income.

Difference between Micro and Macro Economics....

1) Study- Micro Economics is the study of individuals,Whereas Macro Economics is the study of overall aggregate of economy.

2) Deals- Micro Economics deals in individual demand and supply, Whereas Macro Economics covers the market demand and supply.

3) Parameter- Price is the basic parameter of micro economics, Whereas Income is the basic parameter of macro economics.

4) Complex- Micro Economics analysis is simple, Whereas Macro Economics is complex due to study of large groups.

5) Tools- Individual demand and individual supply are the basic tools of micro economics, Whereas aggregate demand and aggregate supply are the basic tools of macro economics.

6) Examples - Demand, supply, production are the examples of micro Economics, Whereas total employment,total savings, level of standard of living are the examples of macro economics.

Thank you ☺️

Diya Chhetija

www.chhetija.diya@gmail.com