Definition Between Microeconomics And Macroeconomics And Its Differences

Definition between microeconomics and macroeconomics and its differences

Introduction

In this research, the definition of microeconomics and macroeconomomy will be developed to be able to differentiate it from each other.

The economy can be defined as a social science that studies the process of production, distribution and consumption of different goods and services to meet human needs.

To be able to produce, man requires resources and techniques that allow him to carry out economic activities. From here derives the importance of knowing that the economy is divided into two large branches.

Macroeconomy

It is responsible for the study of collective economic behavior, studying large aggregates, such as the level of income of the entire society, the general price level, national income, employment, total production, aggregate demand etc.; prosecuting towards the aspects of the economy as a whole.

This branch integrates the four economic entities: families, companies, the government and the external sector. These economic agents act together in various ways and their activity is measured by macroeconomic variables.

Microeconomics

They study the behavior of individual economic agents mainly consumers and companies, which act within a market where there are price training mechanisms.

This is why it is also known as prices theory, since it is responsible for analyzing supply, demand, individual income.

Etc.

The microeconomy analyzes the individual decisions of consumers, considering that the subjects have a series of needs, which will be met through the goods and services generated by companies and that at the time they are consumed they generate a utility. The choice of these items will be based on a series of factors (income, expenses, price of substitute and complementary goods, tastes, fashion, etc.), What will determine the demand for them. Thus, families in relation to consumption will determine the formation of demand.

On the other hand, microeconomics also studies the theory of the company, examining the decision making of entrepreneurs who will have to achieve an optimal combination of production factors (land, work and capital), considering the remuneration of them; that is, its costs; To get a greater gain. You have to take into account other elements such as technology and prices, which will also determine the offer. The final objective of microeconomics is to understand the mechanism through which the total amount of resources that society has among its alternative uses is distributed.

conclusion

This issue is understood that micro and macroeconomy are two divisions of economic theory, microeconomics deals with the economic activity together and the macroeconomics of individuals and their decisions.

Microeconomics is the study of how individual consumers make their decisions: households, companies and domestic economies and their relationship between them; In a globalized world as in which we currently live.

Macroeconomics examines the behavior of the economy, the way in which the decisions of all companies and individuals in the economy interact to produce a certain level of economic performance.

Bibliography

• (s.F.). Retrieved on September 23, 2019, from http: // www.ally.org.MX/DIGITAL LIBRARIES/ECONOMIC_AD -ADMINISTRATIVE/MICROECONOMY.PDF
• (s.F.). Retrieved on September 23, 2019, from File: /// e:/macroeconomia.PDF
• (s.F.). Retrieved on September 23, 2019, from File: /// e:/definition%20de%20Macro%20economia%20y%20 ESCASZ.PDF