Economics is the analyses the production, distribution and consumption of goods and services. In economics, you will find out the consumption of households up to the government. Economics is the study of how we allocate goods and supply from scarce resources. We will also learn the significance of the relationship between supply and demand. We will know if a country is having a deflation or inflation if we know economics.
Deflation is a decrease in the general price level of goods and services while inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Economics has two district or branch. It is microeconomics and macroeconomics. It is a study of a market. Market is any structure that allows buyers and sellers to exchange any type of goods, services and information. Economics will also give knowledge to consumers or buyers. They will be informed in the price ceiling and price floor of goods and services.
For business-minded individuals, they will know if the business they are planning will be successful if they will know the right market. Also the investors need economics so that they will know if investing in a country or a business is not a junk investment. First, let us know the difference of each district. Microeconomics focuses on a small unit of market such as companies and individuals. Microeconomics is a branch of economics that analyzes the market behaviour of individual consumers and firms in attempt to understand the decision-making of a household or firm.
Microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets. Microeconomics studies the different type of market structure such as perfect competition, oligopoly, monopoly and monopolistic competition. Perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product. Monopoly, in which there is only one seller of a good. Oligopoly, in which there are few sellers of a good.
Oligopoly, in which there are few sellers of a good. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. The field of microeconomics is concerned with consumer decision making, firm production and profit maximization, individual market equilibrium, effects of government regulation on individual markets, and externalities and other market side effects. Microeconomics is the study of decisions that people nd 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 supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry. Example of microeconomics is a household. It studies the consumption and buying behaviour of a household.
We will be able to know the reason for that buying behaviour. Consumer behaviour is essential for a business to know because it is how often or how odd a consumer buy and what triggers a consumer to buy. Lastly, microeconomics is a field of economics that focuses on a larger market like a nation or government. Rather than analyzing individual markets, macroeconomics focuses on aggregate production and consumption in an economy. It studies the behaviour of the economy as a whole and not just on specific companies, but entire industries and economies.
This looked compute at larger phenomena such as GNP and GDP. Gross national profit (GNP) is a nation earning that comes from companies in or outside the Philippines owned by a Filipino while Gross Domestic Profit (GDP) are earnings from companies inside the Philippines without regards to the citizenship of the owner. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well.
Single markets often are not confined to single countries; the global market for petroleum is an obvious example. Some topics that we can encounter in macroeconomics are the effects of general taxes such as income and sales taxes on output and prices, the causes of economic upswings and downturns, effects of monetary and fiscal policy on economic health, interest rates are determined and why some economies grow faster than others. It describes relationships among aggregates so big as to be hard to apprehend, such as national income, savings, and the overall price level.
The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy. That is, to minimize fluctuations in growth and prices. Macroeconomics can be used to analyze how best to influence government policy goals such as economic growth, price stability, full employment and the attainment of a sustainable balance of payments. here are two areas of research that are emblematic of the discipline: the attempt to understand the causes and consequences of short-run fluctuations in national income, and the attempt to understand the determinants of long-run economic growth. Macroeconomic models and their forecasts are used by both governments and large corporations to assist in the development and evaluation of economic policy and business strategy. Basically the difference of macro and microeconomics is the market unit it analyzes.
But let me tell you the similarities of these two districts of economics. First, they both analyze the production, consumption and distribution of goods and services. Second, they are both essential in our daily lives. Microeconomics, is for us to know our buying behaviour and how efficient our consumption. Macro economics is for our nation to know our economic standing and compare it to other country. Also to know if a country is experiencing inflation, deflation or recession. I already discussed the meaning of this above.