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Investopedia explains 'Microeconomics'

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Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:02 am


The field of economics is broken down into two distinct areas of study: microeconomics and macroeconomics. Mainly after the great depression in 30's..

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Re: Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:04 am

Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it.

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Re: Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:06 am

People who have any desire to start their own business or who want to learn the rationale behind the pricing of particular products and services would be more interested in this area.

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Re: Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:08 am

Macroeconomics, on the other hand, looks at the big picture (hence "macro"). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world.

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Re: Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:10 am


For example, people who study this branch of economics would be able to interpret the latest Gross Domestic Product figures or explain why a 6% rate of unemployment is not necessarily a bad thing.
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Re: Investopedia explains 'Microeconomics'

Post by sujin007 on Wed Dec 05, 2012 11:11 am


Thus, for an overall perspective of how the entire economy works, you need to have an understanding of economics at both the micro and macro levels.
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