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Division of Economics

The document discusses microeconomics and macroeconomics. Microeconomics examines the behavior of individuals, households, and firms in markets. It focuses on supply and demand factors that influence price. Macroeconomics analyzes whole economies and aggregate indicators like GDP, unemployment, and inflation. It also examines how government policies and business cycles impact markets. Both seek to understand how economic decisions are made and how those decisions allocate scarce resources.

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1K views12 pages

Division of Economics

The document discusses microeconomics and macroeconomics. Microeconomics examines the behavior of individuals, households, and firms in markets. It focuses on supply and demand factors that influence price. Macroeconomics analyzes whole economies and aggregate indicators like GDP, unemployment, and inflation. It also examines how government policies and business cycles impact markets. Both seek to understand how economic decisions are made and how those decisions allocate scarce resources.

Uploaded by

Joey, CPA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Division of Economics: Introduces the two main branches of economics: microeconomics and macroeconomics.
  • Microeconomics: Explains microeconomics as the study of individual and business decisions regarding the allocation of resources and prices of goods and services.
  • Macroeconomics: Describes macroeconomics as the study of economy-wide phenomena, including inflation, unemployment, and economic growth.
  • History of Economics: Covers the evolution of economic thought and the impact of historical figures and ideas on modern economics.
  • Basic Economics Problems: Discusses the three fundamental economic problems: what to produce, how to produce, and for whom to produce.

Division of Economics

• Microeconomics
• Macroeconomics
Microeconomics
 is the study of individuals, households and
firms' behavior in decision making and
allocation of resources. It generally applies to
markets of goods and services and deals with
individual and economic issues.
Additional Information:
Microeconomic study deals with what choices people make, what factors
influence their choices and how their decisions affect the goods markets
by affecting the price, the supply and demand.

https://economictimes.indiatimes.com/definition/microeconomics
Microeconomics
Examples:
 Demand
 Supply
 Elasticity
 Opportunity Cost
 Labor Economics
 Competition
 Competitive Advantage
 Consumer Choice
 Business Confidence
 Information Economics
 Welfare Economics
 Productivity
Microeconomics
Macroeconomics
 Macroeconomics is the branch of economics
that studies the behavior and performance of
an economy as a whole. It focuses on the
aggregate changes in the economy such as
unemployment, growth rate, gross domestic
product and inflation.
Additional Information:
Macroeconomics analyzes all aggregate indicators and the microeconomic factors
that influence the economy. Government and corporations use macroeconomic
models to help in formulating of economic policies and strategies.

https://economictimes.indiatimes.com/definition/macroeconomics
Macroeconomics
Examples:
 Market
 Market Failure
 Competition
 Business Cycles
 Growth
 Price Stability
 Monetary Policy
 Employment
 Goods
 Productivity
 Efficiency
Macroeconomics
History of Economics
 Economics is the science that concerns itself with
economies, from how societies produce goods and
services to how they consume them. It has influenced
world finance at many important junctions throughout
history and is a vital part of our everyday lives. The
assumptions that guide the study of economics, have
changed dramatically throughout history, however.
 Adam Smith – Father of Economics
 Oikomos – Greek word

http://uscentrist.org/platform/docs/history-of-economics
Three Basic Economics Problem:
What Goods and Services to Produce and How much?

 What does a society do when the resources are limited?


 It decides which goods/service it wants to produce.
 It also determines the quantity required. 

 Definition:
This problem involves selection of goods and services to beproduced and the
quantity to be produced of each selected commodity. Every economy has limited
resources and thus, cannot produce all the goods. More of one good or service
usually means less of others.

http://www.yourarticlelibrary.com/problems/3-central-problems-that-
are-faced-by-every-economy-of-a-country/8812
How to Produce Goods and Services?
 Definition:
This problem refers to selection of technique to be used for production
of goods and services. A good can be produced using different
techniques of production. By ‘technique’, we mean which particular
combination of inputs to be used. Generally, techniques are classified
as: Labour intensive techniques (LIT) and Capital intensive techniques
(CIT).

Example:

http://www.yourarticlelibrary.com/problems/3-central-problems-that-
are-faced-by-every-economy-of-a-country/8812
For whom to Produce Goods and Services?
 This problem refers to selection of the category of people who will
ultimately consume the goods.
 Definition:
It has to decide on who gets what share of the total output of goods and
services produced. In other words, society decides on the distribution of
the goods and services among the members of society.

http://www.yourarticlelibrary.com/problems/3-central-problems-that-
are-faced-by-every-economy-of-a-country/8812

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