Macro & Micro Economics

Topics: Economics / Pages: 10 (2291 words) / Published: Jul 18th, 2013
“Economics has never been a science - and it is even less now than a few years ago.”…Paul Samuelson

INTRODUCTION

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. A focus of the subject is how economic agents behave or interact and how economies work. A given economy is the result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions.
The world economic events and how they affect the domestic economy
.The economic activity, and of the interactions of consumers and businesses.
Government policy and its effects.

SCARCITY AND EFFICIENCY: THE TWIN THEMES OF ECONOMICS:

Robbins’s definition of economics (economics is the science of scarcity)

Scarcity of an economic goods or services (means not that it is rare but only that it is not freely available) occurs where it's impossible to meet all unlimited desires and needs of the peoples with limited resources. Society must find a balance between sacrificing one resource and that will result in getting other.
Efficiency denotes the most effective use of a society's resources in satisfying peoples wants and needs. It means that the economy's resources are being used as effectively as possible to satisfy people's needs and desires. Thus, the essence of economics is to acknowledge the reality of scarcity and then figure out how to use these resources to produce the maximum level of satisfaction possible with the given inputs & technology.

Any problem marked by scarcity of means and multiplicity of ends, becomes ipso facto an economic problem, and as such, a legitimate part of the science of economics.

MICROECONOMICS AND MACROECONOMICS

1. Microeconomics: This is considered to be the basic economics. Microeconomics

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