1. Distinguish between microeconomics and macroeconomics. Do you think that the assumptions underlying the two are...

1. Distinguish between microeconomics and macroeconomics. Do you think that the assumptions underlying the two are the same? State the assumptions briefly and evaluate them from a welfare viewpoint.?

can u add an example

Solutions

Expert Solution

Microeconomics is the study of economic decision of a specific individual or firm .

1 Individual markets behavior for demand and supply

2 prices of goods

3 individual labour markets eg demand for labor and wage rate

4 individual consumer behavior

So it is bottom up approach

Macroeconomics is the studies behavior of whole economy and how policies in a country affects the economy as a whole

1 Whole economy that is GDP

2 aggregate prices and inflation and effect

3 level of employment or unemployment in a country

4 effective aggregate demand and affects on output and income

It is top down approach

No assumptions in both are different

Microeconomics takes assumptions of macro economics like aggregate price level, technology changes, expectations etc as constant

Macroeconomics take assumptions of microeconomics like rational consumers, law of demand etc as constant

Welfare economics

Micro theory of distribution explains how rates of rewards for various factors of production are determined

It relates to functional distribution that is theory of factor pricing and welfare

Macro theory of distribution deals with problem of determination of aggregate rewards of various factors in national income means relative shreshth of various factors in national income.

National income of distribution is e uitable or not

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

1. Explain the concept of economics. 2. Distinguish between microeconomics and macroeconomics. 3. Explain the difference...

1. Explain the concept of economics. 2. Distinguish between microeconomics and macroeconomics. 3. Explain the difference between positive and normative statements. 4. Describe the economic way of thinking. 5. Examine opportunity costs and the trade-offs in economics that people face. 6. Discuss factors influencing demand and supply. 7. Elaborate on market equilibrium. 8. Define economics. 9. Explain the concepts of scarcity and opportunity cost and how they relate to the definition of economics. 10. Explain the distinguishing characteristics of the...

Microeconomics and Macroeconomics. Explain the difference between microeconomics and macroeconomics. What are the areas of concern...

Microeconomics and Macroeconomics. Explain the difference between microeconomics and macroeconomics. What are the areas of concern for each of these branches of economics?

How do you distinguish between the concepts of the D and S functions in microeconomics and...

How do you distinguish between the concepts of the D and S functions in microeconomics and the concepts of AD and AS functions in macroeconomics? Why they are different?

The distinction between microeconomics and macroeconomics is A.that microeconomics examines the beach, while macroeconomics looks at...

The distinction between microeconomics and macroeconomics is A.that microeconomics examines the beach, while macroeconomics looks at the sand, individual rocks, and shells, so to speak. B.so clear-cut that every topic can be readily labeled as either macro or micro. C.that microeconomics studies the behavior of individual consumers, workers, and firms, while macroeconomics studies the economy as a whole. D.that microeconomics seeks to obtain an overview, while macroeconomics observes the details of individual components.

The basic difference between macroeconomics and microeconomics is that

The basic difference between macroeconomics and microeconomics is that A). Macroeconomics looks at the forest (aggregate markets); while microeconomics is concerned with the individual trees (subcomponents) B) Macroeconomics is concerned with policy decisions, while microeconomics applies only to theory. C). Microeconomics is concerned with the forest (aggregate markets), while macroeconomics is concerned with the trees (components). D). Opportunity cost is applicable to macroeconomics, and the fallacy of composition relates to microeconomics. E). Micro deals with scarcity while macro does not A store remains open from 8...

The basic difference between macroeconomics and microeconomics is that

1. The basic difference between macroeconomics and microeconomics is that A). Macroeconomics looks at the forest (aggregate markets); while microeconomics is concerned with the individual trees (subcomponents). B) Macroeconomics is concerned with policy decisions, while microeconomics applies only to theory. C). Microeconomics is concerned with the forest (aggregate markets), while macroeconomics is concerned with the trees (components). D). Opportunity cost is applicable to macroeconomics, and the fallacy of composition relates to microeconomics. E). Micro deals with scarcity while macro does not. 2. A store remains open from 8 am to...

The basic difference between macroeconomics and microeconomics is:

1. Describe the discipline of economics and the difference between macroeconomics and microeconomics. 2. If you...

1. Describe the discipline of economics and the difference between macroeconomics and microeconomics. 2. If you are told that one country has a real GDP per capita of $20,000 and another country has a real GDP per capita of $40,000, explain what you know and don’t know about the differences in production and standard of living in those two countries. Make sure your answer shows that you understand exactly what real GDP per capita is!

the major differences between macroeconomics and microeconomics. Explain which of the two that you feel has...

the major differences between macroeconomics and microeconomics. Explain which of the two that you feel has most significantly broadened your understanding of the American economy overall, and which you feel has the most relevance to your individual goals. Refer to two or three the theories, concepts, terms, or models we have studied that you can apply in your daily life.

How do you distinguish between concept of D and S functions in Microeconomics and the concept...

How do you distinguish between concept of D and S functions in Microeconomics and the concept of AD and AS functions in Macroeconomics. Why they are different?

Subjects