Introduction to Micro-Economics - 2163 Words

#61548;Economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. There are many reasons to study economics, including 1.To learn a way of thinking 2.To understand society 3.To understand global affairs 4.To be an informed voter Economics has three fundamental concepts: a. Opportunity cost, b. Marginalism, and c. Efficient markets. a. Opportunity cost is the best alternative that we forgo, or give up, when we make a choice or a decision. b.Marginalism and Sunk Costs: Suppose, for example, that you live in New Delhi and that you are weighing the costs and benefits of visiting your mother in Vashi. If business required that you travel to†¦show more content†¦#61548;A knowledge of economics is essential to be an informed voter. #61548;You might disagree with the above statement when you refer this to the Indian context ! #61548;Well, at least in more-developed countries, it makes more sense. #61548;But the common Indian man has native intelligence about rudimentary economics, even though he may not be formally trained in the subject. #61548;However, it should be no excuse for YOU to understand economics in class ! #61548;Microeconomics is the branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units Ââ€" that is, business firms and households. #61548;Macroeconomics is the branch of economics that examines the economic behavior of aggregates Ââ€" income, employment, output, and so on Ââ€" on a national scale. #61548;For example, microeconomics deals with household income; macroeconomics deals with national income. Economics asks and attempts to answer two kinds of questions, positive and normative. #61548;Positive economics attempts to understand behavior and the operation of economic systems without making judgments about whether the outcomes are good or bad. #61548;It strives to describe what exists and how it works. E.g. What determines the wage rate for unskilled workers? What would happen if we abolished the corporate income tax? #61548;Normative economicsShow MoreRelatedNew Classical Macroeconomics And Macroeconomics Essay1555 Words   |  7 PagesIntroduction New classical Macroeconomics is an important school of macroeconomics development since 1970s. New Classical Macroeconomics is originally evolved from the school of Rational Expectations and monetarism. New classical Macroeconomics is also referred to the Macroeconomics of the rational expectations, or equilibrium method for Macroeconomics. 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