Differences Between Micro And Microeconomics

812 Words4 Pages
1. What is the difference between micro and macro economics? Give an example of a microeconomic phenomenon and an example of a macroeconomic one.

Microeconomics is a smaller window compared to macroeconomics; microeconomics focuses on things surrounding individual businesses and consumers whereas macroeconomics focuses on the bigger picture, or the whole aggregate. Microeconomics is the study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments. Different studies within microeconomics include what to produce and how much to charge when it comes to an individual firm. When looking at a household microeconomics would be the study of what and how much of it to buy. Other areas of study for microeconomics would be poverty, income rate on jobs, consumption patterns, and distribution of output; overall microeconomics is “the branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units that is firms and households.” (Case, Fair, & Oster, 2014)

As mentioned above macroeconomics is the
…show more content…
When referring to microeconomics determining the efficiency would including looking at an individual firm to see if the system is allocating resources to the production of goods and services that individuals are purchasing or to ones that nobody wants. If the resources are going toward goods and services that people are purchasing then the firm is efficient. The best way to determine efficiency for macroeconomics is to look at the production possibility curve; any point of the production possibility curve indicates that all resources are put to full productive use in the economy. If there are points outside the curve, they are desirable but unobtainable, and any points inside the curve mean they are obtainable but undesirable; these two situations are
Get Access