Microeconomics and Microeconomics (Essay Sample)

Microeconomics and Macroeconomics
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Microeconomics and Macroeconomics
Relationship between the micro and macro levels of economic performance
Microeconomics involves of the study of economics in a small phase. It focuses on breaking the economy into different features, and it evaluates each as an explicit factor. The main aim of microeconomics is to identify the potential of lowering the cost of manufacture and increasing the income. Macroeconomics focuses on the entire economy, in this case all the economic actions are viewed generally. It focuses on the government view of the economy on issues concerning taxes and the regulatory actions tackled (Duarte and Lima, 2012).
There is an absolute relationship between microeconomics and macroeconomics based on the aspect of production and consumption. These usually occur based on the decisions made by individual markets and organizations. The external factors have an effect on economic performances, although it can be determined through the analysis of how the general economy functions and how the single markets function. Microeconomics and macroeconomics have an array of attributes that relates them. Macroeconomics focuses on the functioning of the general economy, for example unemployment, gross domestic products and inflation (Reeves, 2012). Microeconomics is concerned with the interaction of demand and supply for goods and services in individual markets.
In macroeconomics, a nation is the main subject since it focuses on how all markets in general interact to create aggregate variables. However, microeconomics focuses on single markets, to determine situations controlled by demand and supply changes. Macroeconomics is global since in most nations; domestic markets are connected to the foreign markets through capital flows and trade (Reeves, 2012). Microeconomics also has a global component whereby the single markets are not confined to single countries; an example is the international market of petroleum.
Microeconomics studies individual and business decisions, based on the allotment of resources and the prices of both goods and services. They also highlight the changes on taxes and regulations by the government. An example, microeconomics tends to examine on how a certain organization can improve their production and capacity, aimed at minimizing prices and enabling it to survive competition in the industry (Duarte and Lima, 2012). Macroeconomics focuses on the governments and nation decision. It views all economic-based phenomena such as the Gross National Profit (GDP), and the effects of unemployment, price levels, national income, and rate of growth. An example, macroeconomics highlights how the effects of net exports increment/decrement on the national capital flow or how the rate of unemployment affects the GDP.
However, the obvious relationship between microeconomics and macroeconomics is based on its production aggregate...