Micro-Economics

2nd year 1st semester

Economics:

Economics is the study of choice that individuals, business, governments and enter
society make as they cope with scarcity and incentives that influence and reconcile
those choice. The subject is divided into two main parts

1. Microeconomics
2. Macroeconomics

Microeconomics:

Microeconomics is the study of the choices that individuals and the business make, the
way these choices interact in markets, and the influence of government.

Microeconomics, branch of economics that deals with small units, includes individual companies
and small groups of consumers. Economics is concerned with the allocation of scarce means
among competing ends. People have a variety of objectives, ranging from the satisfaction of such
minimum needs as food, clothing, and shelter, to more complex objectives of all kinds, material,
aesthetic, and spiritual. However, the means available to satisfy these objectives at any point in
time are limited by the available supply of factors of production (labor, capital, and raw
materials) and the existing technology. Microeconomics is the study of how these resources are
allocated to the satisfaction of competing objectives. It contrasts with macroeconomics, which is
concerned with the extent to which the available resources are fully utilized, or increase over
time, and related issues. It is not always possible to make a distinction between microeconomics
and macroeconomics. For example, the difference between conflicting schools of thought in
macroeconomics is sometimes traced to differences in assumptions related to microeconomics.

Macroeconomics:

Macroeconomics, branch of economics concerned with the aggregate, or overall, economy.

Macroeconomics deals with economic factors such as total national output and income,
unemployment, balance of payments, and the rate of inflation. It is distinct from
microeconomics, which is the study of the composition of output such as the supply and demand
for individual goods and services, the way they are traded in markets, and the pattern of their
relative prices.
Two core economic Questions:

Two big questions summarize the scope of economics

1.

Ten Principal of Economics:

1. People face trade of
2. Opportunity cost (***)
3. Rational people think of margin (***)
4. People respond to incentive
5. Trade can make every one better-of
6. Market are good ways of engaging economic activities
7. Government can sometimes improve market outcome
8. A countries standard of leaving depends on the ability of production
9. Price rises when government prints too much money
10.Society faces a short term tradeof between inflation and unemployment.