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    Scope of Economics

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    deshamudurud
    Microeconomics focuses on individual parts of the economy like households and firms, and how they make decisions and interact in markets. Macroeconomics looks at the whole economy and how markets interact at the national level. The terms micro and macro were introduced in 1933, with micro coming from the Greek word for small and macro from the Greek word for large.

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    Scope of Economics

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    deshamudurud
    125 views6 pages
    Microeconomics focuses on individual parts of the economy like households and firms, and how they make decisions and interact in markets. Macroeconomics looks at the whole economy and how markets interact at the national level. The terms micro and macro were introduced in 1933, with micro coming from the Greek word for small and macro from the Greek word for large.

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    Microeconomics focuses on individual parts of the economy like households and firms, and how they make decisions and interact in markets. Macroeconomics looks at the whole economy and how markets interact at the national level. The terms micro and macro were introduced in 1933, with micro coming from the Greek word for small and macro from the Greek word for large.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    125 views6 pages

    Scope of Economics

    Uploaded by

    deshamudurud
    Microeconomics focuses on individual parts of the economy like households and firms, and how they make decisions and interact in markets. Macroeconomics looks at the whole economy and how markets interact at the national level. The terms micro and macro were introduced in 1933, with micro coming from the Greek word for small and macro from the Greek word for large.

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    of 6

    SCOPE OF ECONOMICS

    MICRO & MACRO ECONOMICS


    The terms ‘Micro & Macro’ Economics were first
    introduced by Ragnar Frisch of Oslo University in
    1933.The term Micro is derived from the Greek word
    ‘Mikros’ meaning small & the term Macro is derived from
    the Greek word ‘Makros’ which means big or large.

    Microeconomics focuses on the individual parts of the


    economy.
    How households and firms make decisions and how
    they interact in specific markets
    Macroeconomics looks at the economy as a whole.
    How the markets, as a whole, interact at the national
    level.
    Definitions of Micro Economics
     According to A.P.Lerner,”Micro Economics consists of
    looking at the economy through a microscope, as it
    were, to see how the millions of cells in the body
    economy-the individuals or households as consumers,
    and the individuals or firms as producers play their
    parts in the working of the whole economic organism.”
     According to K.E.Boulding,”Micro Economics is the study
    of particular firms, particular households, individual
    prices, wages, incomes, individual industries and
    particular commodities.”
     According to Leftwitch, “Micro Economics is concerned
    with economic activities of economic units as
    consumers, resource owners and business firms.”
    Importance of Micro Economics
     It helps in price determination.
     It helps in allocation of resources.
     It helps in determining economic
    policies of the Govt.
     It serves as the basis of welfare
    economics.
     It helps in determining equilibrium of
    the economy.
    Limitations of Micro Economics
     Concept of Marginalism.
     Unrealistic assumptions of full
    employment & lassiez-faire policy.
     It ignores aggregates.
    Importance of Macro Economics

     It includes the study of aggregates.


     It helps in economic planning.
     It helps to study national income.
     It helps to understand general price
    level-inflation & deflation conditions.
     It analyses business cycles.
    Limitations of Macro Economics

     Aggregates do not reveal features of


    individual units.
     It leads to excessive generalisation.

    It leads to inconsistent aggregates.

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