The paper "Identifying and Analyzing Microeconomic Concepts and their Impact on the Economy" is a great example of a report on macro and microeconomics. Microeconomics is a branch of economics that deals with the behavior of firms and individuals when it comes to matters that concern with decision making, interaction, and allocation of the scarce resources that take place among the firms and individuals. The major aim of microeconomics is to analyze the mechanisms that are used in the market in the establishment of the relative prices that goods and services should command in the market.
On top of that, it also looks into the allocation of scarce resources in the market and also determining its alternative use. Microeconomics enables individual firms and individuals to establish how they can attain a free market that can enable them to achieve desirable allocations. Also, microeconomics is the one responsible for ensuring that markets do produce efficient results by analyzing market failures (Nicholson, 12). Compared to macroeconomics that deals with the general factors of the economy, microeconomics deals with individual firms. Macroeconomics deals with factors like unemployment, the general growth of the economy, and inflation.
On the other hand, microeconomics deals with factors that have particular policies that will have an impact on the economy like taxation levels, prices, and supply and demand for goods and services. In this discussion, we are going to look into various concepts of microeconomics (Nicholson, 15). Basic Microeconomics conceptsThere are some of the concepts that one must understand in order to know effectively what microeconomics deals with. Some of these concepts are discussed below. Demand, supply, and equilibriumThe demand and supply concept is one of the basic concepts that must be understood when dealing with microeconomics.
The concepts determine the number of goods and services that should be in a given market at any particular time. From the concept, the pricing of a given commodity can be undertaken at a particular moment. Demand is the number of goods and services that consumers are willing and able to at any particular time. Supply is the number of goods and services that suppliers are willing and able to avail in the market at any particular time.
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Nicholson, Walter. Microeconomic Theory: Basic Principles and Extensions. South-Western College Pub, 8th Edition: 2001.
Pindyck, Robert S.; and Daniel L. Rubinfeld. Microeconomics. Prentice Hall, 7th Edition: 2008
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