Question

describing the field of economics as a whole

Answer 1

Economists are researching choices that we need to make with scarcity. This assumption does not differentiate economics from other social sciences; choices are of interest to all social scientists. An anthropologist may study the choices made by ancient peoples; a political scientist may study the choices made by legislatures; a psychologist may study how people choose a mate; a sociologist may study the factors that led to an increase in single-parent households.

Economists believe that, given the constraints they face, individuals make choices that they expect to produce the maximum value of some objective. In contrast, economists believe that the interests of individuals are the ones that serve their own self-interest. For example, economists believe that business owners are trying to maximize profit. Economists may forecast how businesses in an industry will respond to changes in the markets in which they operate, provided the presumed objective of profit maximization. For example, as labor costs increase in the U.S., analysts are not surprised to see companies moving some of their manufacturing operations overseas.

Microeconomics is the branch of economics that focuses on the choices made by the economy's individual decision-making units— usually consumers and firms— and their impact on individual markets. Macroeconomics is the branch of economics that focuses on the effect of decisions on the level of economic activity as a whole or as a whole.Microeconomics as well as macroeconomics are paying attention to individual markets. But in microeconomics, focus is an end in itself; it is aimed at understanding the movement of major economic aggregates in macroeconomics — the level of total output, the level of employment, and the level of prices.