Question

What is the study of economics about? How is microeconomics different from macroeconomics?

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Answer 1

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Economics is the study of how scarce or limited resources are utilized to satisfy unlimited needs by creating goods and distribute them among different people. The key idea of economics is based on two pillars: first, the resources should be scarce and second is its efficient utilization so as to satisfy maximum needs. It means maximum output by using minimum scarce resources available at disposal. So, Economics is the study of how all the entities that is societies, governments, business houses, households, and individuals assign their limited scarce resources among different needs to be satisfied.

Difference Between microeconomics and macroeconomics

	Microeconomics	Macroeconomics
1.	Microeconomics is the study of issues and problems of single or individual entity.	Macroeconomics is the study of issues and problems of economy as a whole.
2.	Focuses on price and production decisions of individual firm.	It is concerned with aggregate output and general price determination of whole economy.
3.	Its objective is to maximize individual gain.	Its objective is to maximize social welfare.
4.	It has a narrow scope as it studies individual unit.	It has a wide scope as it studies whole economy.
5.	Example: Determination of salary offered by a Company to its new employee.	Example: Determination of overall salary / wage level paid to workers or employees in a given financial year.
6.	Subject matter includes: Individual prices, individual Demand and production, income and consumption.	Subject matter includes: National income, total output, total consumption and general price level.