Microeconomics and macroeconomics assignment help

Microeconomics and Macroeconomics Assignment Help Economics Help Desk Mark Austin

Contact Us: Web: http://economicshelpdesk.com/ Email: info@economicshelpdesk.com Twitter: https://twitter.com/econ_helpdesk Facebook: https://www.facebook.com/economicshelpdesk Tel: +44-793-744-3379

About Economics Help Desk: Economics Help Desk is an online service provider of economics assignment help, economics homework help, dissertations in economics, numerical problems, graphical representation etc. We cover each and every area of economics starting from micro-economics, macro-economics, managerial economics, health economics, development economics, industrial economics, econometrics analysis, environmental economics etc. Our teams of tutors are highly skilled and experienced in handling any kind of assignment problems. We have solved thousands of questions from various fields of economics. We provide high quality customized solution tailored to the specific needs of students. Our step by step answers along with appropriate reasoning makes it easy for a student to learn and understand. Our team is available 24X7 to assist you in your studies, exams and prepares you for a better future.

Why Choose Us? Accuracy: We are a company employed with highly qualified Economics experts to ensure fast and accurate homework solutions aimed at any difficult homework â&#x20AC;&#x201C; both Micro economics and Macro economics. Describe Microeconomics and Macroeconomics: Microeconomics is that branch of economic analysis which studies the behaviour of individual economic units like individual consumer, the individual producer, the individual worker, the individual employer, a given household or a particular firm. individual worker, the individual employer, a given household or a particular firm. Microeconomics analyses as to how a particular producer maximizes his profits or minimizes his cost or how a particular consumer maximizes his satisfaction with his given resources. This branch of economics also deals with the process that determines the price of a particular commodity or reward for a particular commodity or reward for a particular factor of production. Macroeconomics, on the production. Macroeconomics, on the other hand, deals with the economy as a whole and not with the individual economic entities. The macroeconomic analysis is concerned not with the individual consumer or individual producer, but with all the economics, we study the behaviour of aggregates or sum total of various individual economic entities operating in the economy. To quote from Lipsey and Chrystal. Macroeconomics is largely concerned with the behaviour of economic aggregates, such as total national product, total investment, and exports for the entire economy. It is also concerned with the average price of all goods and services, rather than the prices for specific products. These aggregates result from activities in many different markets and from the behaviour of different decision makes such as consumers, government and firms.1

Macroeconomics, thus, is the study of relationships between broad economic aggregates. In the words of Boulding, Macroeconomics does not deal with the individual quantities as such, but with aggregates of these quantities, not with individual incomes, but with national income, not with individual prices, but with the general price level; not with individual output, but with the national output.2 Emphasizing the aggregative nature of macroeconomics, Ackley observes that Macroeconomics is the study of the forces and factors that determine the level of aggregate production, employment and prices in an economy, and their rates of change over time.3 The unit of study in microeconomics is only a part of an economy whereas macroeconomics studies an economy as a whole. Thus, for example, microeconomics explains how a single firm decides about the level of its output or price of the particular product that it produces, Macroeconomics, on the other hand, explains how the output of the economy as a whole and general price level are determined. While microeconomics studies how an individual spends his income, macroeconomics is concerned with overall or aggregate expenditure in the economy as a whole. Thus, being concerned with the economy as a whole, macroeconomics analyses really big issues of economic life such as level of national income, fluctuations in output, income and employment, problems of inflation, deflation, etc. In its approach to the study of the economy, microeconomics essentially assumes total output, total employment or total expenditure on all goods and services as given. It then proceeds to examine how much output each firm will produce, how much labour and capital these individual firms will be determined. Thus, microeconomics is largely concerned with allocation of resources, output and employment among various production units on the assumption that total output and employment are given. Now what microeconomics assumes as given (total output of the economy as a whole), macroeconomics considers it as a prime variable whose size or value is to be determined. Similarly, while microeconomics assumes general price level to be given macroeconomics takes it as a variable.

Describe Significance of Macroeconomics and differentiate between Individual Behavior and Aggregative Behavior. Significance of Macroeconomics: In recent years, macroeconomics has gained much popularity in the field of economic studies. This is because of the fact that macroeconomics studies are not only necessary, but they are absolutely indispensable for the formulation, implementation and execution of national economic policies. The days of Laissez-faire-where government did not interfere economy and thus, individuals were free to act in whatever manner they liked-are no more now. All the governments whether they follow capitalist or socialist ideologies, have these days taken upon themselves, the responsibility of promoting social welfare. This has necessitated an active intervention by the government into the economic affairs of the country. The policies which the government formulates are directed, not towards the few chosen individuals, but towards the general masses. Therefore, the government must possess an adequate knowledge of the behaviour of economic aggregates such as total national income, total consumption, total savings and investment. An accurate and reliable information of these various aggregates is an essential pre-requisite of any sound economic policy. Difference between Individual Behaviour and Aggregative Behaviour The study of macroeconomics has revealed that in many of the cases, the behaviour of the individual economic units has been widely divergent from the behaviour of the aggregate quantities. It is not possible to arrive at any accurate result about the behaviour of the group as a whole, just by studying about the behaviour of all individuals of the group separately. Lord Keynes was one of those economists who drew pointed attention to the glaring mistakes which one is likely to commit in thinking about the economic problem in the micro way. How absurd certain conclusions would be from the macro angle can be explained by some examples, which have come to be known as paradoxes of microeconomics. These paradoxes refer to those propositions which are true when applied to a single individual, but are not true applied to the economic system as a whole. The individual employer always thinks that he can make more by reducing the wages of his workers. This is true, because wages are an important item in cost and hence a reduction in wages, while product prices in the market remaining the same, would naturally boost up profit. But if wages cuts are made by all the employers simultaneously, it would reduce the purchasing power available to the workers. This would result in the fall in profits of the employers. Thus, while an individual employer can surely in a reduction of profits. Similarly, every thrifty individual is likely to think that he is highly virtuous because thrift is not good for individual, but is also necessary for capital accumulation and economic development. If this phenomena is examined on a macro scale, we are likely to encounter startling results. When a particular individual saves part of his income, goods and services. Those sellers, who were supplying goods and services to this person, will be able to sell smaller amount now. So, their gross earnings would fall. This would enable them to save less than what they were saving earlier. Thus, more savings by one man are offset by less savings by the others. So, what is good from micro angle is not necessarily correct from the macro angle.

Similarly, a rise in the price of a particular commodity may benefit the producers of that commodity. But if there is a general rise of prices leading to inflationary conditions, this would reduce the purchasing power of the given income and hence less would be purchased of almost all the commodities. Therefore, the producer may not realize the expected gain. Macroeconomics has thus evolved as a distinct and separate branch of economics to study and analyze the phenomenon that affects the economy as a whole and not merely its individual aspects. In the words of Lipsey and Chrystal. We need a separate subject called macroeconomics because there are forces that affect the economy as a whole that cannot be fully or simply understood by analyzing individual markets and individual products. A problem that is affecting all firms, or many workers, in different industries may need to be tackled at the level of the whole economy.

Turn static files into dynamic content formats.

Create a flipbook