Although there are other branches of economic study, micro and macroeconomics are the most well-known. Over the years, both have become an increasingly common part of high school and college-level curriculums. Despite their popularity, however, the principles of these disciplines are frequently misunderstood or confused. While they share some of the same concepts and are interrelated in important ways, there is a fundamental difference between micro and macroeconomics. The simplest way to distinguish microeconomics from macroeconomics is to think about the names of these two fields. As its name indicates, microeconomics is the study of economics on a smaller, more detailed scale. Similarly, the basic definition of macroeconomics is that it is the study of economics on a larger, broader scale. Definition and Meaning of Microeconomics
Microeconomics looks at the behavior of individual people and companies within the economy. It is based on the idea of a market economy, in which consumer demand is the driving force behind the prices and production levels of goods and services. Microeconomics is interested in how specific parties choose to use the limited resources that are available to them. It focuses on what drives them to make their decisions, as well as the ways in which their decisions affect the supply and demand of particular goods and services. In turn, these choices influence the price levels of various commodities. Microeconomics also examines how the decisions of individuals impact specific industries. For example, economists studying at the micro level might be interested in discovering how current consumer demand is affecting the well-being of the oil industry. Another basic principle of microeconomics is the "theory of the firm." This studies the actions of businesses as they strive to increase their profits. It looks at which resources they choose to utilize as inputs, how much they produce, and what they charge for their goods or services. In...
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