Assignment No. 1
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is micro Economics? Briefly explain macro
economics. Also explain the factors to be studied in both
Micro and macro Economics in detail.
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The word micro means a millionth part. Microeconomics is the study
of the small part or component of the whole economy that we are
analyzing. For example we may be studying an individual firm or in
any particular industry. In Microeconomics we study of the price of
the particular product or particular factor of the production.
The Micro Economics theory studies the behavior of individual
decision-making units such as consumers, recourse owners and
business firms. The role of Micro economics is both positive and
normative; it not only tells how economy operates but also how it
should operate in to improve general welfare.
Macro economics is the study of behavior of the economy as a whole.
It examines the overall level of nations out put, employment, price
and foreign trade.
Macroeconomics is concerned with aggregate and average of entire
economy. e.g. In Macro economics we study about forest not about
In other words in macro economics study how these aggregates and
averages of economy as whole are determined and what causes
fluctuation in them. For making of useful economic policies for the
nation macroeconomics is necessary.
OBJECTS OF MACROECONOMICS
1. A high and rising level of real output.
2. High employment and low unemployment, providing good jobs at
high pay to those who want to work.
3. A stable or gently rising price level, with process and wages
determined by free Markets.
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4. Foreign economic relations marked by stable foreign exchange
rate and exports more or less balancing imports.