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In this Padlet, you will learn about microeconomics and macroeconomics.

Microeconomics is a branch of economics that examines the behavior and decision-making processes of individual economic agents, such as households, firms, and industries. It focuses on smaller-scale economic interactions, addressing key topics such as supply and demand, consumer behavior, production and costs, market structures, and the labor market, among others.

On the other hand, macroeconomics deals with the economy at a broader, aggregate level. It consists of the study of large-scale economic factors, such as Gross Domestic Product (GDP), unemployment, inflation, monetary policy, fiscal policy, and international trade and finance, among other topics. Macroeconomics seeks to understand the overall performance, stability, and growth of the economy, both at the national and global levels.

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This website provides an overview of the field of microeconomics. It describes it as a branch of economics that focuses on the behavior of individual consumers, firms and markets. It explores how the decision-making processes influence the supply and demand for goods and services. It also reflects on topics like elasticity which refers to the quantity demanded or supplied affects the change in price of the goods.

Secondly, it sheds light on cost of production which means how a price of a good is set up including factors such as supply, demand, resource and production processes. Market structures also affect market outcomes like pricing and efficiency.

The reason I selected this website is due to its accessibility for individuals who are new to the study of economics. It provides clear and concise explanations of the key concepts in microeconomics, offering direct and focused information on the fundamental topics that are essential for understanding the subject.

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What Is Microeconomics?

Microeconomics is the social science that studies the implications of incentives and decisions, specifically about how those affect the utilization and distribution of resources. Microeconomics shows how and why different goods have different values, how individuals and businesses conduct and benefit from efficient production and exchange, and how individuals best coordinate and cooperate with one another. Generally speaking, microeconomics provides a more complete and detailed understanding than macroeconomics.

Understanding Microeconomics

Microeconomics is the study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. Individual actors are often grouped into microeconomic subgroups, such as buyers, sellers, and business owners. These groups create the supply and demand for resources, using money and interest rates as a pricing mechanism for coordination.

The Uses of Microeconomics

Microeconomics can be applied in a positive or normative sense. Positive microeconomics describes economic behavior and explains what to expect if certain conditions change. If a manufacturer raises the prices of cars, positive microeconomics says consumers will tend to buy fewer than before. If a major copper mine collapses in South America, the price of copper will tend to increase, because supply is restricted. Positive microeconomics could help an investor see why Apple Inc. stock prices might fall if consumers buy fewer iPhones. Microeconomics could also explain why a higher minimum wage might force The Wendy's Company to hire fewer workers.

These explanations, conclusions, and predictions of positive microeconomics can then also be applied normatively to prescribe what people, businesses, and governments should do in order to attain the most valuable or beneficial patterns of production, exchange, and consumption among market participants. This extension of the implications of microeconomics from what is to what ought to be or what people ought to do also requires at least the implicit application of some sort of ethical or moral theory or principles, which usually means some form of utilitarianism.

Method of Microeconomics

Microeconomic study historically has been performed according to general equilibrium theory, developed by Léon Walras in Elements of Pure Economics (1874) and partial equilibrium theory, introduced by Alfred Marshall in Principles of Economics (1890). The Marshallian and Walrasian methods fall under the larger umbrella of neoclassical microeconomics. Neoclassical economics focuses on how consumers and producers make rational choices to maximize their economic well being, subject to the constraints of how much income and resources they have available. Neoclassical economists make simplifying assumptions about markets-such as perfect knowledge, infinite numbers of buyers and sellers, homogeneous goods, or static variable relationships-in order to construct mathematical models of economic behavior.

These methods attempt to represent human behavior in functional mathematical language, which allows economists to develop mathematically testable models of individual markets. Neoclassicals believe in constructing measurable hypotheses about economic events, then using empirical evidence to see which hypotheses work best. In this way, they follow in the "logical positivism" or "logical empiricism" branch of philosophy. Microeconomics applies a range of research methods, depending on the question being studied and the behaviors involved.

Basic Concepts of Microeconomics

The study of microeconomics involves several key concepts, including (but not limited to):

Incentives and behaviors: How people, as individuals or in firms, react to the situations with which they are confronted.

Utility theory: Consumers will choose to purchase and consume a combination of goods that will maximize their happiness or "utility," subject to the constraint of how much income they have available to spend.

Production theory: This is the study of production-or the process of converting inputs into outputs. Producers seek to choose the combination of inputs and methods of combining them that will minimize cost in order to maximize their profits.

Price theory: Utility and production theory interact to produce the theory of supply and demand, which determine prices in a competitive market. In a perfectly competitive market, it concludes that the price demanded by consumers is the same supplied by producers. That results in economic equilibrium.

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Microeconomics Definition, Uses, and Concepts

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Microeconomics is the social science that studies the implications of incentives and decisions, specifically about how those affect the utilization and distribution of resources. Microeconomics shows how and why different goods have different values, how individuals and businesses conduct and benefit from efficient production and exchange, and how individuals best coordinate and cooperate with one another.

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The Britannica article on supply and demand explains the fundamental economic model That helps to understand how prices and quantities of goods I did demand in a competitive market the two major concepts are supply and demand. Supply refers to the quantity of occurred or service that producers are willing and able to offer at different price levels whereas demand describe the quantity that consumers are willing and able to purchase at those price levels. The article also talks about equilibrium price which means the quantity supplied equals to quantity demanded. There is neither excess supply or excess demand. Article also provides information about supply and demand curves and the factors by which they can be triggered such as changes in consumer preferences, production costs or external events.

The reason why I chose this topic is because this gives learners better understanding of supply and demand as it includes graphs and how microeconomics plays role in banking.

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microeconomics, branch of economics that studies the behaviour of individual consumers and firms. Unlike macroeconomics, which attempts to understand how the collective behaviour of individual agents shapes aggregate economic outcomes, microeconomics focuses on the detailed study of the agents themselves, by using rigorous mathematical techniques to better describe and understand the decision-making mechanisms involved.

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This article focuses on broad economic factors such as gross domestic product, unemployment rates, inflation, national income and economic growth.

Macroeconomics examines how policies impact economic stability and growth. It also investigates the inter relationships between various sectors of the economy like government household or businesses and how changes in one can affect the overall economy. This article also highlights key concepts like aggregate demand and supply. Economic cycles that show the fluctuations between the period of economic expansion and contraction. It also gives a review on monetary policy. How the money supply and interest rates by central banks are controlled to influence economic activities. fiscal policy includes government spending and taxation decisions that influences economic performance.

I chose this website because it gives an insight of the major factors involved in macroeconomics and it also compares the differences between macroeconomics and microeconomics.

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What Is Macroeconomics?

Macroeconomics is a branch of economics that studies how an overall economy-the market systems that operate on a large scale-behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

Some of the key questions addressed by macroeconomics include: What causes unemployment? What causes inflation? What creates or stimulates economic growth? Macroeconomics attempts to measure how well an economy is performing, to understand what forces drive it, and to project how performance can improve.

Macroeconomics deals with the performance, structure, and behavior of the entire economy, in contrast to microeconomics, which is more focused on the choices made by individual actors in the economy (like people, households, industries, etc.).

Understanding Macroeconomics

There are two sides to the study of economics: macroeconomics and microeconomics. As the term implies, macroeconomics looks at the overall, big-picture scenario of the economy. Put simply, it focuses on the way the economy performs as a whole and then analyzes how different sectors of the economy relate to one another to understand how the aggregate functions. This includes looking at variables like unemployment, GDP, and inflation. Macroeconomists develop models explaining relationships between these factors. Such macroeconomic models, and the forecasts they produce, are used by government entities to aid in the construction and evaluation of economic, monetary and fiscal policy; by businesses to set strategy in domestic and global markets; and by investors to predict and plan for movements in various asset classes.

Given the enormous scale of government budgets and the impact of economic policy on consumers and businesses, macroeconomics clearly concerns itself with significant issues. Properly applied, economic theories can offer illuminating insights on how economies function and the long-term consequences of particular policies and decisions. Macroeconomic theory can also help individual businesses and investors make better decisions through a more thorough understanding of what motivates ot, andarties and how to best maximize utility and scarce resources.

Limits of Macroeconomics

It is also important to understand the limitations of economic theory. Theories are often created in a vacuum and lack certain real-world details like taxation, regulation and transaction costs. The real world is also decidedly complicated and their matters of social preference and conscience that do not lend themselves to mathematical analysis.

Even with the limits of economic theory, it is important and worthwhile to follow the major macroeconomic indicators like GDP, inflation and unemployment. The performance of companies, and by extension their stocks, is significantly influenced by the economic conditions in which the companies operate and the study of macroeconomic statistics can help an investor make better decisions and spot turning points.

Likewise, it can be invaluable to understand which theories are in favor and influencing a particular government administration. The underlying economic principles of a government will say much about how that government will approach taxation, regulation, government spending, and similar policies. By better understanding economics and the ramifications of economic decisions, investors can get at least a glimpse of the probable future and act accordingly with confidence.

Areas of Macroeconomic Research

Macroeconomics is a rather broad field, but two specific areas of research are representative of this discipline. The first area is the factors that determine long-term economic growth, or increases in the national income. The other involves the causes and consequences of short-term fluctuations in national income and employment, also known as the business cycle.

Economic Growth

Economic growth refers to an increase in aggregate production in an economy. Macroeconomists try to understand the factors that either promote or retard economic growth in order to support economic policies that will support development, progress, and rising living standards.

Adam Smith's classic 18th-century work, An Inquiry into the Nature and Causes of the Wealth of Nations, which advocated free trade, laissez-faire economic policy, and expanding the division of labor, was arguably the first, and certainly one of the seminal works in this body of research.﻿﻿ By the 20 th century, macroeconomists began to study growth with more formal mathematical models. Growth is commonly modeled as a function of physical capital, human capital, labor force, and technology.

Business Cycles

Superimposed over long term macroeconomic growth trends, the levels and rates-of-change of major macroeconomic variables such as employment and national output go through occasional fluctuations up or down, expansions and recessions, in a phenomenon known as the business cycle. The 2008 financial crisis is a clear recent example, and the Great Depression of the 1930s was actually the impetus for the development of most modern macroeconomic theory.

History of Macroeconomics

While the term "macroeconomics" is not all that old (going back to the 1940s), many of the core concepts in macroeconomics have been the focus of study for much longer. Topics like unemployment, prices, growth, and trade have concerned economists almost from the very beginning of the discipline, though their study has become much more focused and specialized through the 1990s and 2000s. Elements of earlier work from the likes of Adam Smith and John Stuart Mill clearly addressed issues that would now be recognized as the domain of macroeconomics.

Macroeconomics, as it is in its modern form, is often defined as starting with John Maynard Keynes and the publication of his book The General Theory of Employment, Interest, and Money in 1936. Keynes offered an explanation for the fallout from the Great Depression, when goods remained unsold and workers unemployed. Keynes's theory attempted to explain why markets may not clear.﻿﻿

Prior to the popularization of Keynes' theories, economists did not generally differentiate between micro- and macroeconomics. The same microeconomic laws of supply and demand that operate in individual goods markets were understood to interact between individuals markets to bring the economy into a general equilibrium, as described by Leon Walras.﻿﻿ The link between goods markets and large-scale financial variables such as price levels and interest rates was explained through the unique role that money plays in the economy as a medium of exchange by economists such as Knut Wicksell, Irving Fisher, and Ludwig von Mises.

Throughout the 20 th century, Keynesian economics, as Keynes' theories became known, diverged into several other schools of thought.

Macroeconomic Schools of Thought

The field of macroeconomics is organized into many different schools of thought, with differing views on how the markets and their participants operate.

Classical Classical economists hold that prices, wages, and rates are flexible and markets always clear, building on Adam Smith's original theories.
Keynesian Keynesian economics was largely founded on the basis of the works of John Maynard Keynes. Keynesians focus on aggregate demand as the principal factor in issues like unemployment and the business cycle. Keynesian economists believe that the business cycle can be managed by active government intervention through fiscal policy (spending more in recessions to stimulate demand) and monetary policy (stimulating demand with lower rates). Keynesian economists also believe that there are certain rigidities in the system, particularly sticky prices that prevent the proper clearing of supply and demand.
Monetarist
The Monetarist school is largely credited to the works of Milton Friedman. Monetarist economists believe that the role of government is to control inflation by controlling the money supply. Monetarists believe that markets are typically clear and that participants have rational expectations. Monetarists reject the Keynesian notion that governments can "manage" demand and that attempts to do so are destabilizing and likely to lead to inflation.
New Keynesian
The New Keynesian school attempts to add microeconomic foundations to traditional Keynesian economic theories. While New Keynesians do accept that households and firms operate on the basis of rational expectations, they still maintain that there are a variety of market failures, including sticky prices and wages. Because of this "stickiness", the government can improve macroeconomic conditions through fiscal and monetary policy.
Neoclassical Neoclassical economics assumes that people have rational expectations and strive to maximize their utility. This school presumes that people act independently on the basis of all the information they can attain. The idea of marginalism and maximizing marginal utility is attributed to the neoclassical school, as well as the notion that economic agents act on the basis of rational expectations. Since neoclassical economists believe the market is always in equilibrium, macroeconomics focuses on the growth of supply factors and the influence of money supply on price levels.
New Classical
The New Classical school is built largely on the Neoclassical school. The New Classical school emphasizes the importance of microeconomics and models based on that behavior. New Classical economists assume that all agents try to maximize their utility and have rational expectations. They also believe that the market clears at all times. New Classical economists believe that unemployment is largely voluntary and that discretionary fiscal policy is destabilizing, while inflation can be controlled with monetary policy.
Austrian
The Austrian Schoo l is an older school of economics that is seeing some resurgence in popularity. Austrian school economists believe that human behavior is too idiosyncratic to model accurately with mathematics and that minimal government intervention is best. The Austrian School has contributed useful theories and explanations on the business cycle, implications of capital intensity, and the importance of time and opportunity costs in determining consumption and value.

Macroeconomics vs. Microeconomics

Macroeconomics differs from microeconomics, which focuses on smaller factors that affect choices made by individuals and companies. Factors studied in both microeconomics and macroeconomics typically have an influence on one another. For example, the unemployment level in the economy as a whole has an effect on the supply of workers from which a company can hire.

A key distinction between micro- and macroeconomics is that macroeconomic aggregates can sometimes behave in ways that are very different or even the opposite of the way that analogous microeconomic variables do. For example, Keynes proposed the so-called Paradox of Thrift, which argues that while for an individual, saving money may be the key building wealth, when everyone tries to increase their savings at once it can contribute to a slowdown in the economy and less wealth in the aggregate.﻿﻿

Meanwhile, microeconomics looks at economic tendencies, or what can happen when individuals make certain choices. Individuals are typically classified into subgroups, such as buyers, sellers, and business owners. These actors interact with each other according to the laws of supply and demand for resources, using money and interest rates as pricing mechanisms for coordination.

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Everything You Need to Know About Macroeconomics

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Macroeconomics is a branch of economics that studies how an overall economy-the market systems that operate on a large scale-behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment. Some of the key questions addressed by macroeconomics include: What causes unemployment?

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This article includes information about GDP growth, domestic demand, exports, imports, household spending, housing investment, business investment, inventory investment, terms of trade, wages and compensation, household savings common trust payments and corporate profits. It tells us how these factors contributed in the growth or downfall of Canadian economy imports fell by 0.4% various household grew by 0.2% which mainly included trucks and utility vehicles but as compared to 2022 there was a downfall.

The reason for choosing this article was because it shows the difference by percentage which gives a better understanding of the factors that have grown or declined throughout the year. There have also been comparisons between 2022 in 2023.

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The Daily — Gross domestic product, income and expenditure, fourth quarter 2023

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Real gross domestic product (GDP) edged up 0.2% in the fourth quarter of 2023, following a 0.1% decline in the third quarter. In the fourth quarter, higher exports and reduced imports fuelled GDP growth, but this was moderated by a decline in business investment.

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This video reflects on the problems that are leading to economic downfall of Canada. To begin with, housing prices have surged dramatically since 2008 financial crisis. Due to this most of the Canadians have given up the dream of owning a house. Canadians have invested more on housing rather than businesses that contributes to 22% of the economic growth and innovation. Moreover, Canada's economy relies heavily on natural resources but because of declining oil prices are weaking the resource sector. Other than that, A lot of talented Canadians are moving to USA because of higher salaries and better opportunities.

The reason for choosing this video is that it is a perfect example of how macroeconomics is affected by microeconomics that is how large businesses or global economy is affected by small businesses or factor like low income.

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The Problem with Canada’s Economy | Canadian Economy

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This we do explain two of the main factors of macroeconomics : fiscal policy and monetary policy. Fiscal policies to use of government spending and taxation to influence the economy. To manage the economy, there should be a balance between income and spendings. This video explains how taxation has a large impact on the global income. It explains the two types of policies that are expansionary and contractionary. Monetary policy is managed by the central banks by taking care of money supply and interest rates the major tools of monetary policy our money creation, discount rate and open market operations.

The reason why I chose this video is because both the policies have common goals lay controlling unemployment, inflation and economic growth that have become a recent concern in Canada.

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The Difference Between Fiscal and Monetary Policy

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This image shows the basic difference between microeconomics and macroeconomics. On the left side it shows that microeconomics includes matters related to individual finances household finances and small farm finances where is macroeconomics includes matters related to national economic income, governmental finances and global finances.

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This image shows how economy is inter-related with all the factors of macroeconomic and microeconomics. It shows how savings and consumption expenditure are equal to Factors like wages, rent interests and profits and how they are equivalent to investments and consumption expenditure.

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1. The most astonishing fact for me during this assignment was in website #4 where I could see the inclines and declines in percentage and the comparisons in year 2022 and 2023. From there, I could understand why Canada's condition is worsening and how bad it is right now.

2. Personally, this helps us to understand that we apply microeconomics in our daily lives. In small investments at banks, buying gold or selling skills we need to think as an economist and think of the outcomes. There is also another thing we need to prepare ourselves for, is the LOSE. there will be times when we make and investment and make profit of of it and lose from it.

3. The most important information that I would like to pass to my family is the fact that both macroeconomics and microeconomics are interrelated with each other. Both are directly proportional no to each other if one is affected the other one is also affected.