Macroeconomics is concerned with the study of the economy as a whole. Macroeconomists utilize various types of current and historical data to analyze such issues as the existence of varying levels of inflation, the causes of recessions and depressions, how to prevent or alleviate recessions or depressions, the factors that allow for the economic development of countries, why different countries experience differing rates of economic development, and the effects of trade and trade balances on an economy.
Microeconomics is concerned with choices of individuals and firms within an economy, under conditions of scarcity or limited resources. Microeconomists seek to analyze the rational decisions made by individual consumers or individual firms as they seek to maximize well-being, and the interactions amongst these individuals and firms in the allocation of scarce resources. Microeconomics is also known as price theory since prices are often a primary consideration in the decision-making process. Equilibrium models and basic supply and demand concepts are used to analyze such problems as consumer choice and utility maximization, production decisions of the firm, competition, market structures, oligopolies and monopolies, competitive strategies, externalities and market failure.
Microeconomics is concerned with choices of individuals and firms within an economy, under conditions of scarcity or limited resources. Microeconomists seek to analyze the rational decisions made by individual consumers or individual firms as they seek to maximize well-being, and the interactions amongst these individuals and firms in the allocation of scarce resources. Microeconomics is also known as price theory since prices are often a primary consideration in the decision-making process. Equilibrium models and basic supply and demand concepts are used to analyze such problems as consumer choice and utility maximization, production decisions of the firm, competition, market structures, oligopolies and monopolies, competitive strategies, externalities and market failure.