Answer to Question #209290 in Microeconomics for Johnny Banda

Question

Explain in your own words, the difference between Microeconomics and Macroeconomi cs. In your explanation, use relevent examples in reference to Papua new Guinea's Economy.

Answer 1

Solution:

Microeconomics refers to the branch of economics that deals with the study of individual, household, and business behaviors in decision making and distribution of resources. It encompasses markets for goods and services and handles economic issues, including studying a specific market segment of the economy. It tackles issues such as demand and supply, pricing of goods and services, production, and consumption.

On the other hand, macroeconomics refers to the branch of economics that studies the behavior and performance of the entire economy of a specific country, covering multiple market segments. It handles Gross Domestic Product, inflation, unemployment, and growth rate. It tackles issues such as national income, general price level, employment, deflation, inflation, and poverty as a whole.

 

Examples of microeconomics issues in Papua New Guinea include demand and supply of agricultural products, production and consumption of agricultural products and minerals, and pricing levels of goods and services.

Example of macroeconomic issues in Papua New Guinea includes Real GDP, Real household consumption, Consumer price index, Aggregate real imports and exports, Aggregate employment and Real trade balance.