MICRO AND

MACROECONOMICS
Jhuanne Christine S. Garcia
Midwifery II
Microeconomics
◦ The prefix ‘micro’ is derived from the Greek word
‘mikros’ meaning small.
◦ “Micro economics studies the economic behavior of
individual economic units and individual economic
variables.”
◦ The study of economic behavior of the households,
firms, and industries forms the subject-matter of micro
economics.
 Micro economics is
concerned with
economic activities of
individual economic
units as consumers,
resource owners and
business firms. It explains how these
It revolves individuals as consumers
around the or households, as
interaction of resource owners and as
producers play their
consumers and part in the working of
producers in the whole economic
system.
market.
Subject-Matter of Micro Economics
Micro economics is concerned with:

Product Welfare
Market: Factor market:
Economics

Theory of
demand

Theory of
Theory of Theory of
Theory of cost product
production distribution
pricing
Thus, micro economics deals with the:
• Determination of product prices

• Determination of factor prices and their quantities in the individual

markets.

• The allocation of resources among various firms and industries.

• It deals with the action and interaction of individual markets-product and

factor markets.
Importance of Micro Economics
Functioning of the
Economic efficiency
market economy

Allocation of Helpful in
resources international trade

Useful in business
Price determination
decision

Formulation of
economic policy
Macroeconomics
◦ The prefix ‘macro’ is derived from the Greek word
‘makros’ meaning large.
◦ Macro economic is the study of the economy as a
whole.
◦ Macro economics “ deals with the functioning of the
economy as a whole.”
Subject-Matter of Macro Economics
Theory of National Income

Theory of Output and Employment

Theory of General Price Level

Theory of Economic Growth

Theory of International Trade

Theory of Money
Importance of Macro Economics
Understanding the Insight into micro
working of the economy economics

Understanding the major

Helpful in international
issues facing the
trade
economy

Useful in formulating
government’s economic International comparison
policies
Quiz:
1. It is the study of economic behavior of the households, firms and industries forms the
subject-matter.
2. Give the 5 theory under product market.
3. What theory under factor market?
4. Give the 3 concern of micro economic
5. Deals with the functioning of the economy as a whole.
6. Give the 6 subject-matter of macro economics.
7. ‘Makros” means…….
8. ‘Mikros’ means……..
9. What do you think are the differences between micro economic and macro
economic?