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ECON1101 Coursework Assignment
ECON1101 Coursework Assignment
INTERNATIONAL
UNIVERSITY OF EAST
AFRICA(IUEA)
INTRODUCTION TO
MICROECONOMICS
(ECON1101)
NAME: MIKIAS
MHRETEAB TEKLE
REG NO: 22/1476/BBA-S
2. Microeconomics vs macroeconomics
B. MACROECONOMICS
-Is the study of the national economy as well as global economy and the way that a
economic system works. Macro means ‘big’. It studies a national economy as a whole.
Focusses on issues that affect nations and the world economy and on the behavior and
performance of aggregate variables.
Includes regional , national and international economies and covers the major areas of the
economy. Macroeconomics discusses how the equilibrium is attained as a result of
changes in the macroeconomic variables. GDP , economic growth , imports and exports ,
monetary policy , unemployment , poverty , general price level , interest rates , inflation ETC
are some examples of macroeconomics.
-The points given below explains the difference between micro and macro economics in
detail:
1. Microeconomics studies the particular segment of the economy, i.e. an individual ,
household , firm or industry. It studies the issues of the economy at an individual level.
On the other hand, Macroeconomics studies the whole economy, that does not talk about a
single unit rather it studies aggregate units, such as national income , general price level ,
total consumption etc. It deals with broad economic issues.
2.Microeconomics is applied to operational or internal issues, whereas macroeconomics
concerned on environmental and external issues.
3. Micro stresses on individual economic units. As macro focus on aggregate economic
units.
4. The basic tools of microeconomics is demand and supply. Conversely, aggregate supply
and aggregate demand are primary tools for macroeconomics.
5. Micro covers issues like how the price of particular commodity will affect its quantity
demanded and quantity supplied and vice versa. In contrast, Macroeconomics covers major
issues of an economy like unemployment , poverty , international trade , inflationary
increase in prices etc.
6. Microeconomics determine the price of particular commodity along with the prices of
complementary and the substitute goods, whereas the macroeconomics helps maintain the
general price level, as well as it helps in resolving major economic issues like inflation ,
disinflation , poverty , unemployment etc.
7. While analyzing any economy, microeconomics takes a bottom-up approach, whereas the
macroeconomics considers a top-down approach.
To conclude , Studying the whole Economics is becoming more valuable and important
nowadays as the world’s resources are becoming more scarce and scarce through time
and the economic competition of countries becomes more stronger. Creating a society
which is conscious in economics (economic society) can help the country to produce
more outputs by proper use of limited resources and increase its economic growth and
development which also provide or fulfill high satisfaction of its people’s wants.
References
1.website www.wikieducator.com
2.website www.investopedia.com
3.academic gain tutorials(AGT)
4. ‘Principles of Economics’ by N. Gregory Mankiw
5. https://en.wikiversity.org/wiki/10_Principles_of_Economics