Microeconomics and Macroeconomics

Microeconomics - the study of the economic decisions and actions of individual consumers, producers and households, and how these economic decision makers interact.

What does microeconomics consider?

• How individual firms organise production and why

• What determines the wages paid to different groups of workers

• What affects the purchasing decisions of individual consumers

• What determines the prices of goods and services

Macroeconomics - the study of the national economy which considers economic issues and actions that affect the whole economy

What does macroeconomics consider?

• What determines the total output of all firms in an economy

• What is the total or national income of the economy and what causes it to change over time

• What determines the overall level of employment or unemployment

• What causes inflation in general level of prices and what impact does it have