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Notesecon1 - 2/18/10 5:23 PM THE SCOPE OF ECONOMICS...

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2/18/10 5:23 PM THE SCOPE OF ECONOMICS MICROECONOMICS AND MACROECONOMICS Microeconomics- the branch of economics that examines the functioning of individual industries and the behavior of individual decision making units- that is, firms and households Microeconomics- behavior of individual consumers and firms Firms’ choices about what to produce and how much to charge Household choices about what and how much to buy Who gets the goods produced Wealthy households get more than poor households Microeconomics deals with household income Micro focuses on individual product prices and relative prices Micro questions how many people will be hired/fired this year in a particular industry or area Focuses on factors that determine how much labor a firm or an industry will hires Macroeconomics- the branch of economics that examines the economic behavior of aggregates- income, employment, output,
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