MICRO AND MACRO ECONOMICS DIFFERENCE HOW TO

With its help, suggestion may be given in the context of problems of any related industry, by the study of government policies. It Helps in Regional Policy Formulation: With the help of micro-economics the study of particular area or particular use is possible.Likewise, there is optimum utilization of the factors of production when their marginal products become unequal. Microeconomic law, like the law of substitution, shows how a consumer can maximize his satisfaction by equating the ratios of marginal utilities to the prices of different goods which he buys.

MICRO AND MACRO ECONOMICS DIFFERENCE HOW TO

It Teaches the Art of Economizing: microeconomic principles deal with the economizing of scarce resources and show how to use them efficiently.Similarly, a firm or an industry can take decisions decision regarding volume of production at various levels, taking production costs into consideration.

A consumer may take decision in what quantity a commodity is to be purchased, at various prices. Hence, economic decisions in respect to individual units may be taken easily, with its help.

Helps in Individual Decisions: Microeconomics studies the individual units.

It Explains Various Aspects of International Trade: Microeconomics theories explain many aspects of international trade such as the emergence, nature and gains of international trade, determination of exchange rate, impact of tariffs on prices etc.

Economics studies economics problems where as in micro-economics, small units are studied, which facilitates in understanding the economy and aggregate study of bigger problem. Hence, after study of small units, the study of the problem of the total economy becomes easier.

Helps in Aggregate Study of Economic Problems: The total economy is constituted of several small units.

Price Determination: Micro-economics plays an important role in price determination and volume of production, allocation of resources etc.

The importance and use of micro-economics are explained below:

Micro and macro economics difference