Tuesday, June 28, 2022

Microeconomics vs Macroeconomics – Concept, Definition & Application

dear viewers good morning and very warm welcome in another educational video at our facebook and youtube channel the academic concepts as you know our aim is to make this world conceptually clear today we are going to discuss.

Regarding microeconomics versus macroeconomics my dear friends please concentrate on this picture on left side you can see use of magnifying glass and on the right side use of telescope as you know magnifying glass is used to see nearby and smaller objects.

Whereas telescope is used to see far away objects so what do you get by this on left side it is microeconomics it is the study of internal environment whereas on the right side it is macroeconomics it is the study of external environment see another picture.

In this picture on left side you can see microeconomic behavior in that there is an individual a household and production firm their income expenditure and received expenditure whereas on the right side there are many individuals.

Household and production firms in a circle managed by a government in a country their gdp and gnp this is macroeconomic behavior we will see this slide again towards the end of the lecture now coming over to the academic definitions.

My friends microeconomics is the study of economics at an individual group or company level whereas macroeconomics is the study of a national economy as a whole microeconomics focuses on issues that affect individuals and companies whereas macroeconomics focuses on issues that affect nations.

And the world economy now coming over one by one first of all microeconomics it is the study of individuals households and firms behavior in decision making and allocation of resources it generally applies to markets of goods and services.

And deals with individual and economic issues the examples are individual income market labor market consumer behavior and supply of goods now coming over to macroeconomics it is the branch of economics that studies the behavior and.

Performance of an economy as a whole it focuses on the aggregate changes in the economy such as unemployment growth rate gross domestic product and inflation the examples are national income inflation gdp.

And unemployment levels etc now we can we will see both the concepts and their implications first of all on the smaller scale it is market at serial one and or larger scale it is gdp on micro level it is effect of prices of goods.

And on macro level its the inflation at number three at microeconomics level it is the labor market whereas at macroeconomics level the unemployment and employment at lower level it is consumer behavior and on larger level it is aggregate demand.

Similarly at microeconomics level the supply of goods and on macroeconomics level it is the capacity of economy now see another angle on the left column you see the parameters and against that in the second column it is microeconomics and the third column it.

Is macroeconomics it first of all how it deals the microeconomics deals with individual economic variables whereas macroeconomics deals with aggregate economic variables the central problem at lower level it is price determination.

And resource allocation and on larger level it is determination of level of income and employment if we see the business application at micro level it is applied to operational or internal issues on micro on macro level it is applied to.

Environment and external issues if we see the approaches the microeconomics deals with the bottom-up approach to analyze any economy whereas macroeconomics deals the top-down approach to analyze any economy i hope it is clear now now the see see this slide again which.

We have seen in the initial part of the lecture i hope it will be much clearer now on left side all the things which is coming under micro economic behavior deals with individual household and production firms.

Whereas on macroeconomic behavior it is the larger picture which comes under the government and country level and their gdp that is gross domestic product and gross national product my friends i hope you have well understood the concepts if you have any doubt please feel free to ask the questions in comment box.

Viewers if you want to see the same lecture in urdu language the link will be given in description box please sit stay connected to our channel so that you get more educational and conceptual videos please like the video and subscribe the channel thanks a lot and stay blessed.

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