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|Maurice McBride-Owens | |
|Economics for the Global Manager | |
What are the main differences between microeconomics and macroeconomics? Provide an example of a microeconomic and macroeconomic phenomenon.
Microeconomics and Macroeconomics play an important role in today’s forever evolving financial circumstances. However there are differences between the two, so before I discuss the differences, I’d like to define each one to give further clarity to the meanings.
Microeconomics is defined as small-scale vs. large-scale in comparison to macroeconomics. Microeconomics deals with the study of decisions that people and businesses make regarding the allotment of property, time, capital and prices of services and or goods. (Boyes and Melvin, 2005) Macroeconomics is the study of the economy as a whole and deals with the performance, structure, and behavior of a national or regional economy. Macroeconomics is a much broader study of the economy which focuses on the unemployment rates, national income and GDP of a nation.(wilkipedia,2007)So to put this in in the simplest terms,micro means a smaller study of economics and macro means a larger study of econmomics.
An influence of a microeconomic phenomenon determines a firm’s current or potential location, markets that affect a firm , agricultural location, surrounding retail locations ,metropolitan industrialization, globalization, cost, transportation, transaction prices, and supply & demand on items. An example of a microeconomic phenomenon is a family decision to downsize from an Chevy SUV to a Hyundai Sonata based on current gas prices or a firm’s decision to raise the price on an in store item in order to compensate for the increased wholesale price that has been applied to that particular item. A...