Micro & Macro Economics PDF

Micro & Macro Economics 17 derived from Greek words Mikros - 1 part of a millionth Makros - large coined by Noregion Scie...

Micro & Macro Economics 17 derived from Greek words Mikros - 1 part of a millionth Makros - large coined by Noregion Scientist Ragnar Frisch. 1933 ☆ His torical review of Micro economis ts - 1st analysis done on micro - traditional method - traced during classical economists time - Adamsmith Popularised by Neo-classical economist Sir Alfred Marshall in his book iprinciples of Economics! - Imp role played in development by Prof Samuelson, Prof. Pigou etc ☆ Historical theory of Macro - existed before micro - 16- 17th - century -mercantile - advised gov → based on Macro eco - 18th century - physiocrats - analysis- Nat Inc; wealth - Eco like Adamsmith, Ricardo α - Micro @co omelet till Great Dep of 1930 - After great deph, Lord John Maynard Keynes in his book "General theory of E I M [EMI! Explained Macro - LIMK → Macro approach → eco probs - credit → macro → LIMK - others like malthus, Walras, Irving Fisher etc → macro ☆ scope of micro Eco - part of a millionth - study of ind units like ind firm, prod etc - Maurice dobb defines" microscopic study of economy- ind. 1) Theory Of Product pricing - Price = market force = demand & supply - desmond ; supply ind. consumer ind. producer behaviour behaviour 2) Theory of Factor pricing - factor-LLEC - labour, land on o o o o entrepreneur, cap - determine factor rewards after  calc. Salary int, profit, exp. 3) Theory of Economic Welfare. :- Welfare- reallocation of resources - read Ofr = maximisation of satisfaction - Includes:- Efficiency of production Max g&s proal with given amt-of resources ◦ Efficiency of consumption' Max satisfaction overall eco efficiency produce goods desirable by society conclusion:- Micro = Price theory, realloca - tion of resources  No whole eco. ☆ features of micro Eco 1) Study of Ind. units:- ↓ = ind firms, prod. etc. 27 Price theory :- price = goods services, & factors of prod. price theory 3) Partial Equilibrium :- - Equillibrium = balance bet. 2 analyse P-E- position eg of ind- units i.e ind firms, prod. isolates micro eco from other units & studies it independently 4) Based on assumption :- Ceteris Peribus  ◦ Suchas laissez faire, true capitalism, etc. ◦ makes analysis simpler 5) Slicing method:- MIE uses slicing method divides eco into individual units & studies (analysis them] Eg Ind demand from market demand Income 67 Uses Marginalism Principle:- - analysew - marginal = change in total by addition of lunit. - study of a variable using this principle  - Producers & cons = Eco. decisions 7) & 8.) P Importance of Micro -Economics - Price determination:- help to determine price of goods & Services & various factors of prod. - Free market Economy :-FME helps to study & analyse face market eco- - FME means study where eco decisions are made by cons at ind- units.