Summary Micro Macro Economics

ECS1501

MICROECONOMICS AND MACROECONOMICS –

|MICROECONOMICS |MACROECONOMICS |
|The price of a single product |The consumer price index |
|Changes in the price of a single product |Inflation |
|The production of a product |The total output of all goods n services |
|The decisions of individual consumers |The combined outcome of the decisions of all consumers in the country |
|The decisions of individual firms or businesses |The combined decisions of all firms in S.A |

• Microeconomics – the focus is on individual parts of the economy. Decisions or functioning of decision makers such as individuals, households, firms or other orgs. Are considered are considered in isolation from the rest of the economy. • Macroeconomics – is concerned with the economy as a whole. An overall view of the economy and aggregate economic behavior is studied. Emphasis on topic such as total production, income and expenditure, economic growth, aggregate unemployment, inflation etc is studied. • The problem of economizing is essentially one of deciding how to make the best use of limited resources to satisfy unlimited want • Opportunity cost is best defined as the value of the best alternative sacrificed when a choice is made • An unskilled labourer would be viewed by economists as a factor of production. • A technological improvement in the production of a good or service will cause a rightward/outward shift of the PPC • Interest is income from capital • A capital intensive production system is dominated by capital goods • Capital, wealth and natural