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Wednesday, July 6, 2011

Micro and Macro Economics

Economics divided into two parts.
One is Microeconomics and other one is Macroeconomics.
Microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets
Macroeconomics involve the "sum total of economic activity, dealing with the issues of growth, inflation and unemployment, and with national economic policies relating to these issues" and the effects of government actions on them.

The Greek word for “one who manages a household.”
Economics is a social science and it is the study of how society manages its scarce resources.
Therefore, Economic is the science of choice – the science that explains the choices that we make and how those choices change as we hope with scarcity.
All economic choices can be summarized in big questions about the goods and services we produce.
These questions are: What? How? When? Where? Who?
What goods and services are produced and in what quantities?
How are goods and services produced?
When are goods and services produced?
Where are goods and services produced?
Who consume the goods and services that are produced?
These five big economic questions give you a sense of what economics about. They tell you about the scope of economics. But they don’t tell you what economics is.

What is economics?

Economics is a social science that studies how society chooses to allocate its scarce resources, which have alternative uses, to provide goods and services for present and future consumption.

Social Science

Economics is a science, a social science that studies how society chooses.
Sciences are alike in their use of the scientific method, although each science has its own focus.
Social sciences focus on human behavior.
Physical sciences focus on natural phenomenon. Psychology is a social science. Chemistry is a physical science.
Economics is a social science, which means that economists study human behavior confronted by scarcity through application of the scientific method.
Economics is a social science that studies how society chooses to allocate its scarce resources, which have alternative uses, to provide goods and services for present and future consumption.