293766200 - Economics Economics focuses on optimisation and...

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Economics
Economics focuses on optimisation and
equilibrium
Macroeconomics: the general economy and
asks whether macroeconomic indicators such
as inflation, unemployment and the cost of
capital are in equilibrium
Microeconomics: optimising of behaviour of
consumers and producers and asks whether
the observed equilibrium prices and quantities
in each market are economically efficient.

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Competition vs. monopoly
Monopoly - regulation
Competition - market
Economically efficient:
Under perfect competition the interaction
of many buyers and sellers yields a market
price equal to the cost of producing the
last unit sold.

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Micro vs. macro economics
In a book example: single market –
microeconomics
In reality: many markets interact –
macroeconomics
E.g. electricity market and natural gas market
interacts; markets in one area may influence
markets in other areas;
Partial equilibrium to general equilibrium for
the economy as a whole – macroeconomics

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Macroeconomic influence