Eco. 102 (Online Discussion/Quiz–05/12/2022—Fundamental Principles of Macro and Micro Economics

Microeconomics is entirely contradictory to macroeconomics. It is a narrower concept that focuses only on a single market or segment. This study only interprets the tiny components of the economy. The study states that the market attains equilibrium when the supply of goods controls the
Microeconomics Principles
1 – Demand and Supply
2 – Opportunity Cost
3 – Law of Diminishing Marginal Utility
4 – Giffen Goods
5 – Veblen Goods
6 – Income and Elasticity
7 – Substitution and Elasticity
Demand and Supply: When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand..
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
demand are optimal, a state of equilibrium is achieved. The correlation between demand and supply and the state of equilibrium assumes that all other factors except price and demand remain constant.

2 – Opportunity Cost: A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opporty cost This is with the assumption that the choices are mutually exclusive
.It is an opportunity which a decision-maker lets go of. Say Samson plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.
3 – Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.

4 – Giffen Goods: Giffen goods
are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve
is positively sloped.It is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.

3 – Law of Diminishing Marginal Utility: This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit .consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
4 – Giffen Goods: Giffen goods are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve is positively sloped.For instance, the price rise of petrol doesn’t reduce its demand.
5– Veblen Goods: these are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.
6 – Income and Elasticity: As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

.7 – Substitution and Elasticity: Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand For example, if the price of leather jackets rises, consumers will prefer to buy woolen overcoats to shield themselves in winters.
.Macroeconomic study focuses on three broad areas and the interrelationships between them. These three concepts affect all participants in an economy, including consumers, workers, producers and government.
There are macroeconomics principles
Economic Output
Macroeconomics studies the national output, or income, of a country. National economic output is the total value of all goods and services produced in an economy during a specific time period. Economists measure national output by calculating the gross domestic product (GDP), which is the market value of final goods and services that an economy produces during a specific period of time. Economists will use the term real GDP, which is GDP valued at a constant price level, to compare current output with past output. This comparison will tell you if the economy is growing, is stagnant, or is contracting.

The basic model used in macroeconomics to study economic fluctuations is the model of aggregate demand and aggregate supply. The model involves two variables: the economy’s output, which is measured by real GDP, and the economy’s overall price level, measured by a price index (usually the GDP deflator or CPI). You can plot the general price level in an economy on the vertical axis of a graph and the quantity of output on the horizontal axis. The aggregate supply curve is upward sloping in the short-run, but vertical in the long-run. The aggregate demand curve is downwþard slopping. Economic output and price level will move towards the point where aggregate supply equals aggregate demand.

Fluctuations in economic output are generally caused by one of two things. First, fluctuations can occur when the aggregate demand shifts. If the aggregate demand curve shifts to the left, output and prices will decline. If the curve shifts to the right, output and prices will rise. Second, economic fluctuations may be caused by a shift in aggregate supply. A right shift in the aggregate supply curve means that the quantity of goods and services supplied will increase at a particular price level. If the short-term aggregate supply curve shifts to the left, output will fall and prices will rise – this is called stagflation.

MICRO ECONOMICS: This is simply referred to as an aspect of Economics that is concerned with the single factors or individual decisions with its benefits and effects, e.t.c. It is also referred to as the study of individuals, households and firms ‘behaviour’ in decision making and also in allocation of resources. Micro economics was coined by a professor named Ragnar Frisch.

MACRO ECONOMICS: This is simply referred to as another branch or aspect of Economics, that deals with the large-scale or general economics factors I.e National Productivity and Increase rates. In other words, it is the branch of Economics that is concerned with the study of the behaviour of an economy as a whole. It focuses on the aggregate changes in the economy such as Growth rate, unemployment e.t.c

5 KEY PRONCIPLES OF MICRO ECONOMICS
Micro economics primarily comprises of:
1. Income Theory .
2. Pricing theory .
3. Production theory.
4. Consumer behaviour theory.
5. Marginal utility theory.

5 MAJOR PRINCIPLES OF MACRO ECONOMICS.
Basic principles which Macro economics focuses on are as follows.
1. Economic Output.
2. Economic growth.
3. Unemployment.
4. Inflation investments.
5. Deflation investments.

Okeke Juliet Kelechi
2020/242642
Economics dept

Micro economics is the study of individuals, households and firms’ behavior in decision making and allocation of resources.
Basic microeconomics focuses on five principles which are :

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.

Macro economics deals with performance, structures, behavior and decision making of an economy as a whole.
Basic macroeconomics focuses on five main principles. The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

Economic output : is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.

Economic growth: is measured by comparing GDP over time.

Unemployment: is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. 

Inflation and deflation: Inflation is the persistent rise in the price of goods as a result of large volume of money in circulation.

NAME: REMIGIUS CHIDEBERE RICHARD
REG. NO: 2020/242621
DEPARTMENT: ECONOMICS MAJOR

There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables.

In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation.

Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example.

Microeconomics and macroeconomics are two different perspectives on the economy. The microeconomic perspective focuses on parts of the economy: individuals, firms, and industries. The macroeconomic perspective looks at the economy as a whole, focusing on goals like growth in the standard of living, unemployment, and inflation. Macroeconomics has two types of policies for pursuing these goals: monetary policy and fiscal policy.

Obi Francisca Nwamaka
2020/248211
Education Economics
The economic theory developed considerably between the appearance of Smith’s The Wealth of Nations and the Great Depression, but there was no separation into microeconomics and macroeconomics. Economists implicitly assumed that either was in equilibrium—such that prices would adjust to equalize supply and demand—or that in the event of a transient shock, such as a financial crisis or a famine, markets would quickly return to equilibrium. In other words, economists believed that the study of individual markets would adequately explain the behaviour of what we now call aggregate variables, such as unemployment and output.

The severe and prolonged global collapse in economic activity that occurred during the Great Depression changed that. It was not that economists were unaware that aggregate variables could be unstable. They studied business cycles—as economies regularly changed from a condition of rising output and employment to reduced or falling growth and rising unemployment, frequently punctuated by severe changes or economic crises. Economists also studied money and its role in the economy. But the economics of the time could not explain the Great Depression. Economists operating within the classical paradigm of markets always being in equilibrium had no plausible explanation for the extreme “market failure” of the 1930s.

Economists also look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global petroleum market is an obvious example.
In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global petroleum market is an obvious example.

The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves macroeconomists or macroeconomists. The American Economic Association recently introduced several new academic journals. One is called Microeconomics. Another, appropriately, is titled Macroeconomics.
It was not always this way. In fact, from the late 18th century until the Great Depression of the 1930s, economics was economics—the study of how human societies organize the production, distribution, and consumption of goods and services. The field began with the observations of the earliest economists, such as Adam Smith, the Scottish philosopher popularly credited with being the father of economics—although scholars were making economic observations long before Smith authored The Wealth of Nations in 1776. Smith’s notion of an invisible hand that guides someone seeking to maximize his or her well-being to provide the best overall result for society as a whole is one of the most compelling notions in the social sciences. Smith and other early economic thinkers such as David Hume gave birth to the field at the onset of the Industrial Revolution.

The economic theory developed considerably between the appearance of Smith’s The Wealth of Nations and the Great Depression, but there was no separation into microeconomics and macroeconomics. Economists implicitly assumed that either market was in equilibrium—such that prices would adjust to equalize supply and demand—or that in the event of a transient shock, such as a financial crisis or a famine, markets would quickly return to equilibrium. In other words, economists believed that the study of individual markets would adequately explain the behaviour of what we now call aggregate variables, such as unemployment and output.

The severe and prolonged global collapse in economic activity that occurred during the Great Depression changed that. It was not that economists were unaware that aggregate variables could be unstable. They studied business cycles—as economies regularly changed from a condition of rising output and employment to reduced or falling growth and rising unemployment, frequently punctuated by severe changes or economic crises. Economists also studied money and its role in the economy. But the economics of the time could not explain the Great Depression. Economists operating within the classical paradigm of markets always being in equilibrium had no plausible explanation for the extreme “market failure” of the 1930s.

If Adam Smith is the father of economics, John Maynard Keynes is the founding father of macroeconomics. Although some of the notions of modern macroeconomics are rooted in the work of scholars such as Irving Fisher and Knut Wicksell in the late 19th and early 20th centuries, macroeconomics as a distinct discipline began with Keynes’s masterpiece, The General Theory of Employment, Interest and Money, in 1936. Its main concern is the instability of aggregate variables. Whereas early economics concentrated on equilibrium in individual markets, Keynes introduced the simultaneous consideration of equilibrium in three interrelated sets of markets—for goods, labour, and finance. He also introduced “disequilibrium economics,” which is the explicit study of departures from general equilibrium. His approach was taken up by other leading economists and developed rapidly into what is now known as macroeconomics.
The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:

Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually or quarterly.

This graph shows the percentage of the total GDP for each sector of the economy of British Columbia in 2018.

Pie Graph of British Columbia 2018 GDP by Sector

Aggregate demand and supply create the model to determine the total economic output.

Economic Growth
Economic growth is measured by comparing GDP over time.
. This will show if the growth is positive or negative.

Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.

Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.

Actual unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.

The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers. The formula for the labor participation rate is a bit different because it only considers the civilian workforce. The labor participation rate is found by dividing the total civilian population available for work divided by the number of those people who are working or seeking work. Both the unemployment rate and the labour participation rate can be used to measure unemployment

NAME: OSUCHUKWU VIVIAN CHIAMAKA
REG NO: 2020/245659
EMAIL: vivianosuchukwu@gmail.com
DEPARTMENT: ECONOMICS MAJOR

MICROECONOMICS is the study of how individuals and businesses make choices regarding the best use of limited resources. Its principles can be usefully applied to decision-making but in everyday life—for example, when you rent an apartment. Most people, after all, have a limited amount of time and money. They cannot buy or do everything they want, so they make calculated microeconomic decisions on how to use their limited resources to maximize personal satisfaction.

Fundamental principles of microeconomics are:

1. Maximizing utility—Maximizing utility means that individuals make decisions to maximize their satisfaction.

2. Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative.

3. Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.

4. Supply and demand—Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

MACROECONOMICS is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture – it analyzes the entire economy.

Fundamental principles include:
1. Economic output
Economic output measures the value of all sales of goods and services. This sounds simple enough but in this way, it is the sum of the final purchases and intermediate inputs, therefore resulting in the double counting of intermediate purchases.

2. Economic growth
Economic growth is an increase in the quantity and quality of the economic goods and services that a society produces

3. Inflation and deflation

Inflation is an increase in the general prices of goods and services in an economy.
Deflation, conversely, is the general decline in prices for goods and services, indicated by an inflation rate that falls below zero percent.
Both can be potentially bad for the economy, depending on the underlying reasons and the rate of price changes.

4. Investment
An investment is an asset or item accrued with the goal of generating income or recognition. In an economic outlook, an investment is the purchase of goods that are not consumed today but are used in the future to generate wealth. In finance, an investment is a financial asset bought with the idea that the asset will provide income further or will later be sold at a higher cost price for a profit.

5. Unemployment
The term unemployment refers to a situation where a person actively searches for employment but is unable to find work. Unemployment is considered to be a key measure of the health of the economy.

MICRO ECONOMICS
Microeconomics is the study of individual and business decisions regarding the allocation of resources and prices of goods and services. The term also considered taxes, regulations, and government legislation. It doesn’t try to explain which actions should take place in a market, but rather the effects of changes in certain conditions. Microeconomics has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics.
KEY PRINCIPLES OF MICROECONOMICS
One of the microeconomics’ core principles involves demand, supply, and equilibrium, as they collectively influence prices.
Another principle involves production theory, which explores how goods and services are created or manufactured.
A third principle involves the costs of production, which ultimately determine the price of goods and services.
Finally, the principle of labor economics attempts to explain the relationship between wages, employment, and income.
MACRO ECONOMIC
Macroeconomics is the study of the decisions of countries and governments. The term analyzes entire industries and economics rather than individuals or specific companies. Macroeconomics tries to determine the optimal rate of inflation and factors that may stimulate economic growth. For instance, macroeconomics may analyze how the unemployment rate affects the gross domestic product. Macroeconomics describes relationships among national income, savings, and overall price level.
KEY PRINCIPLES IN Macroeconomics
ECONOMIC GROWTH, which refers to an increase in aggregate production in an economy. This can be modeled as a function of physical capital, human capital, labor force, and technology.
Another principle involves BUSINESS CYCLES, an area of macroeconomics that considers variables like employment and national output. The Great Depression of the 1930s spurred the development of modern macroeconomic theory.

Macroeconomics is the study of whole economies–the part of economics concerned with large-scale or general economic factors and how they interact in economies while microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.
John Maynard Keynes, considered the founding father of macroeconomics, wrote The General Theory of Employment, Interest and Money in 1936. In the book, he introduced the simultaneous consideration of equilibrium in goods, labor, and finance.
Macro economics has four major types which is
1.Inflation.
2.GDP (Gross Domestic Product)
3.National Income.
4.Unemployment levels.
Microeconomics can be be analysed in three ways namely
1.Micro Statics.
2.Comparative Micro Statics.
3.Micro Dynamics.
Microeconomics is based on models of consumers or firms (which economists call agents) that make decisions about what to buy, sell, or produce—with the assumption that those decisions result in perfect market clearing (demand equals supply) and other ideal conditions. Macroeconomics, on the other hand, began from observed divergences from what would have been anticipated results under the classical tradition.
Contemporary microeconomic theory evolved steadily without fanfare from the earliest theories of how prices are determined. Macroeconomics, on the other hand, is rooted in empirical observations that existing theory could not explain. How to interpret those anomalies has always been controversial. There are no competing schools of thought in microeconomics—which is unified and has a common core among all economists. The same cannot be said of macroeconomics—where there are, and have been, competing schools of thought about how to explain the behavior of economic aggregate.
Microeconomics explains that to earn maximum profit producers should decrease supply when prices are low and increase supply when prices are high, but if all individual suppliers decrease the supply of a commodity, then collectively the overall supply would change, and this will have effects on income, expenditure, taxation policies etc. Thus to overcome the shortcomings of microeconomic theory, the macroeconomic theory came into existence which focuses on aggregates and discusses the welfare of the economy as a whole.

Obiakor Chika Vincent
2020/246576
Principles of Microeconomics
They include:
1. Demand and Supply
The relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.
2. Opportunity Cost
Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.
3. Law of diminishing marginal utility
It states that the marginal utility of a good or service declines as a consumer consumes more of it. For example, an individual might buy a certain type of chocolate for a while. Soon, they may buy less and choose another type of chocolate or buy cookies instead because the satisfaction they were initially getting from the chocolate is diminishing
4. Income and elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
Principle of Macroeconomics
They include
Economic output:
Economic output is the primary indicator considered in macroeconomics. Economic output is the total value of goods and services produced in a country. Output plays a big part in measuring Gross Domestic Product (GDP). GDP is a standard measure of economic output used today.
Economic growth:
Economic growth is the increase in the value of an economy’s goods and services, which creates more profit for businesses.
Unemployment:
The term unemployment refers to a situation where a person actively searches for employment but is unable to find work. Unemployment is considered to be a key measure of the health of the economy.

Fundamental principles of Macro and Micro Economics:

Economist look at two realms.
There is big – picture macroeconomics , which is concerned with how the overall economy
works,it studies such things as employment, gross domestic product, and inflation – the stuff of news stories and government policy debates.
Little picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.
In macroeconomics, the subject is typically a nation – how all markets interact to generate big phenomena that economist call aggregate variable
In realm of microeconomics, the object of analysis is a single market – for example, whether price rises in the automobile or oil industries are driven by supply or demand changes
The government is a major object of analysis in macroeconomics – for example, studying the role it plays in contributing to overall economic growth or fighting inflation, macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment and capital flows, But microeconomics can have an international component as well.single markets often are not confined to single countries, the global market for petroleum is an obvious example.
The macro/ micro split is institutionalised in economics, from beginning courses in ” principles of economics” through to postgraduate studies.Economics commonly consider themselves microeconomists or macroeconomists

NAME: Eze Emmanuel Ifeanyi
REG NO: 2020/243120
DEPT: Philosophy

Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach. Microeconomics is concerned with how supply and demand interact in individual markets for goods and services. Essentially In Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine its course and nature. Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level.

Kiwamu Favour Chizaram
2020/242601
Principles of Microeconomics
They include:
1. Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand. Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply. When supply and demand are optimal, equilibrium is said to be reached
2. Opportunity Cost
This can be defined as the cost a customer incurs by choosing an alternative over another.It is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a soap and selects Dettol soap over extract soap, then Sandra bears the opportunity cost of not choosing the extract soap
3. Law of diminishing marginal utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer.
4. Income and elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
Principle of Macroeconomics
They include
Economic output:
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.Governments typically release their GDP either annually or quarterly.Aggregate demand and supply create the model to determine the total economic output.
Economic growth:
Economic growth is measured by comparing GDP over time.
Unemployment:
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people.

NAME: UGWUOKE OKWUDILICHUKWU DAVID
DEPARTMENT: PHILOSOPHY
REG NUMBER: 2020/247716
ECO 102

Assignment
Fundamental Principles of Macroeconomics and Microeconomics

Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.
Microeconomic study deals with what choices people make, what factors influence their choices and how their decisions affect the goods markets by affecting the price, the supply and demand.

Macroeconomics studies the behavior of a country and how it’s policies impact on the economy as a whole. It analyzes the entire industries and economies, rather than individuals or specific companies. Macroeconomics tries to answer questions such as “what should be the rate of inflation” or “what stimulates economic growth ”.
It also analyzes how an increase or decrease in net exports impacts a nation’s capital account.

Examples of microeconomics are; individual demand and price of a product.
Macroeconomics includes GDP (Gross Domestic Product), unemployment, aggregate demand and national income.

Differences Between Microeconomics and Macroeconomics
(1) Microeconomics studies the particular market segment of the economy while macroeconomics studies the whole economy, that covers several segments.

(2) Microeconomics is applied to internal issues while macroeconomics is applied to environmental and external issues.

(3) Microeconomics covers several issues like demand, supply, factor pricing, product pricing, economic welfare and production consumption.
On the other hand, macroeconomics covers several issues like distribution, national income, employment, money and general price level.

(4) Microeconomics is useful in regulating the prices of a product alongside the prices of factors of production (labour, land, entrepreneur, capital, and more) within the economy while macroeconomics perpetuates firmness in the broad price level, and solves the major

Fundamental Principles of Macroeconomics
° National Income: This area of Macroeconomics analyses the wealth a nation generates. It looks at the value of goods and services produced by a country over the course of a year. There are different measures for this such as; Gross National Product, Gross Domestic Product and Net National Income

° Inflation: This is the study of how the cost of goods and services rises as time goes on.

° Economic Output: This is the study of the goods and services which a country produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to a greater employment and tax revenue .

°International Trade: This area looks at the trade that occurs between nations in terms of goods, services and raw materials . International trade often forms a larger part of a nation’s income as the world is a larger market than a single nation.

Fundamental Principles of Microeconomics
° Opportunity Cost: A consumer who is also a decision maker has limited resources (money) and unlimited options( opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost .
° Demand and Supply: When demand exceeds supply over a period, suppliers either increase the supply or the price . As prices go up, demand will reduce since the number of people that can afford it goes down .
° It takes a top- down approach and looks at the economy as a whole.
° Its polices are as follows; Fiscal policy, Monetary policy and Supply Side policy.
° It primarily comprises the Pricing theory, Consumer theory, Production theory and Marginal Utility.

NAME:ODOH MMESOMA JESSICA
DEPARTMENT: COMBINED SOCIAL SCIENCES
(ECONOMICS/PHILOSOPHY )
REG NUMBER: 2020/242893
ECO 102

FUNDAMENTAL PRINCIPLES OF MACROECONOMICS AND MICROECONOMICS

Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources and the prices at which they trade goods and services. It considers taxes, regulations and government legislation.
Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It tries to understand human choice, decisions and the allocation of resources. Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets

Macroeconomics studies the behavior of a country and how it’s policies impact on the economy as a whole. It analyzes the entire industries and economies, rather than individuals or specific companies. Macroeconomics tries to answer questions such as “what should be the rate of inflation” or “what stimulates economic growth ”.
It also analyzes how an increase or decrease in net exports impacts a nation’s capital account.

Examples of microeconomics are; individual demand and price of a product.
Macroeconomics includes GDP (Gross Domestic Product), unemployment (including unemployment rates), national income, price indices, output, consumption, inflation, saving, investment, energy, international trade, and international finance.

Differences Between Microeconomics and Macroeconomics
(1) Microeconomics studies the particular market segment of the economy while macroeconomics studies the whole economy, that covers several segments.

(2) Microeconomics is applied to internal issues while macroeconomics is applied to environmental and external issues.

(3) Microeconomics covers several issues like demand, supply, factor pricing, product pricing, economic welfare and production consumption.
On the other hand, macroeconomics covers several issues like distribution, national income, employment, money and general price level.

Name: Oduenyi Chiamaka Promise
Department: Public Administration and Local Government
Registration Number: 2020/24324
Email address: promiseoduenyi@gmail.com

MICROECONOMICS
Microeconomics is a branch of mainstream economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the national economy as whole, which is studied in macroeconomics.
Microeconomics study deals with what determines how households and individuals spend their budgets? What combination of goods and services will best fit their needs and wants, given the budget they have to spend? How do people decide whether to work, and if so, whether to work full time or part time? How do people decide how much to save for the future, or whether they should borrow to spend beyond their current means?
What determines the products, and how many of each, a firm will produce and sell? What determines what prices a firm will charge? What determines how a firm will produce its products? What determines how many workers it will hire? How will a firm finance its business? When will a firm decide to expand, downsize, or even close? In the microeconomic part of this book, we will learn about the theory of consumer behavior and the theory of the firm.

PRINCIPLES OF MICROECONOMICS
1. SUPPLY AND DEMAND
Two important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

2. DIMINISHING MARGINAL UTILITY
Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.

3. OPPORTUNITY COST
Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. Because opportunity costs are unseen by definition, they can be easily overlooked.

4. PRODUCTION
Production is the process of making or manufacturing goods and products from raw materials or components. In other words, production takes inputs and uses them to create an output which is fit for consumption – a good or product which has value to an end-user or customer. Producers seek to choose the combination of inputs and methods of combining them that will minimize cost in order to maximize their profits.

MACROECONOMICS
Macroeconomics (from the Greek prefix makro- meaning “large” + economics) is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and government spending to regulate an economy’s growth and stability.[1] This includes regional, national, and global economies.
Macroeconomics study deals with what determines the level of economic activity in a society? In other words, what determines how many goods and services a nation actually produces? What determines how many jobs are available in an economy? What determines a nation’s standard of living? What causes the economy to speed up or slow down? What causes firms to hire more workers or to lay workers off? Finally, what causes the economy to grow over the long term?

PRINCIPLES OF MACROECONOMICS
1. UNEMPLOYMENT
The amount of unemployment in an economy is measured by the unemployment rate, i.e. the percentage of workers without jobs in the labor force. The unemployment rate in the labor force only includes workers actively looking for jobs. People who are retired, pursuing education, or discouraged from seeking work by a lack of job prospects are excluded.

2. ECONOMIC OUTPUT
National output is the total amount of everything a country produces in a given period of time. Everything that is produced and sold generates an equal amount of income. The total output of the economy is measured GDP per person. The output and income are usually considered equivalent and the two terms are often used interchangeably, output changes into income. Output can be measured or it can be viewed from the production side and measured as the total value of final goods and services or the sum of all value added in the economy.

3. ECONOMIC GROWTH
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of increase in the real gross domestic product, or real GDP.

4. INFLATION AND DEFLATION
Inflation occurs when the prices of goods and services rise, while deflation occurs when those prices decrease. The balance between these two economic conditions, opposite sides of the same coin, is delicate and an economy can quickly swing from one condition to the other.
Inflation is a quantitative measure of how quickly the price of goods in an economy is increasing. Inflation is caused when goods and services are in high demand, thus creating a drop in availability.
Deflation occurs when too many goods are available or when there is not enough money circulating to purchase those goods. As a result, the price of goods and services drops.

5. INVESTMENT
An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time. When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth.

Name: Ogbu Philip Chukwuemeka
Faculty: Faculty of the social sciences
Department: Philosophy
Reg no: 2020/243105
Email: ogbuphilipchukwuemeka@gmail.com

Course: Eco 102Macroeconomics is the study of large scale economic issues such as those which affect the entire economy. This is in contrast to Microeconomics which looks at smaller scale economic principles. Macroeconomics is a highly practical discipline as it deals with principles that directly impact every part of life. The economy has a knock on effect on almost every part of people’s lives as a nation’s economic well-being affects its employment, healthcare, consumer confidence and so forth.

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.

Name: Muomegha Maryann Tochi
Reg no: 2020/246802
Email address: maryannmuomegha@gmail.com

Economics is split between analysis of how the overall economy works and how single markets function

Physicists look at the big world of planets, stars, galaxies, and gravity. But they also study the minute world of atoms and the tiny particles that comprise those atoms.

Economists also look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example.

The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves microeconomists or macroeconomists. The American Economic Association recently introduced several new academic journals. One is called Microeconomics. Another, appropriately, is titled Macroeconomics.

Why the divide?
It was not always this way. In fact, from the late 18th century until the Great Depression of the 1930s, economics was economics—the study of how human societies organize the production, distribution, and consumption of goods and services. The field began with the observations of the earliest economists, such as Adam Smith, the Scottish philosopher popularly credited with being the father of economics—although scholars were making economic observations long before Smith authored The Wealth of Nations in 1776. Smith’s notion of an invisible hand that guides someone seeking to maximize his or her own well-being to provide the best overall result for society as a whole is one of the most compelling notions in the social sciences. Smith and other early economic thinkers such as David Hume gave birth to the field at the onset of the Industrial Revolution.

Economic theory developed considerably between the appearance of Smith’s The Wealth of Nations and the Great Depression, but there was no separation into microeconomics and macroeconomics. Economists implicitly assumed that either markets were in equilibrium—such that prices would adjust to equalize supply and demand—or that in the event of a transient shock, such as a financial crisis or a famine, markets would quickly return to equilibrium. In other words, economists believed that the study of individual markets would adequately explain the behavior of what we now call aggregate variables, such as unemployment and output.

The severe and prolonged global collapse in economic activity that occurred during the Great Depression changed that. It was not that economists were unaware that aggregate variables could be unstable. They studied business cycles—as economies regularly changed from a condition of rising output and employment to reduced or falling growth and rising unemployment, frequently punctuated by severe changes or economic crises. Economists also studied money and its role in the economy. But the economics of the time could not explain the Great Depression. Economists operating within the classical paradigm of markets always being in equilibrium had no plausible explanation for the extreme “market failure” of the 1930s.

If Adam Smith is the father of economics, John Maynard Keynes is the founding father of macroeconomics. Although some of the notions of modern macroeconomics are rooted in the work of scholars such as Irving Fisher and Knut Wicksell in the late 19th and early 20th centuries, macroeconomics as a distinct discipline began with Keynes’s masterpiece, The General Theory of Employment, Interest and Money, in 1936. Its main concern is the instability of aggregate variables. Whereas early economics concentrated on equilibrium in individual markets, Keynes introduced the simultaneous consideration of equilibrium in three interrelated sets of markets—for goods, labor, and finance. He also introduced “disequilibrium economics,” which is the explicit study of departures from general equilibrium. His approach was taken up by other leading economists and developed rapidly into what is now known as macroeconomics.

Coexistence and complementarity
Microeconomics is based on models of consumers or firms (which economists call agents) that make decisions about what to buy, sell, or produce—with the assumption that those decisions result in perfect market clearing (demand equals supply) and other ideal conditions. Macroeconomics, on the other hand, began from observed divergences from what would have been anticipated results under the classical tradition.

Today the two fields coexist and complement each other.

Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets. Much economic analysis is microeconomic in nature. It concerns such issues as the effects of minimum wages, taxes, price supports, or monopoly on individual markets and is filled with concepts that are recognizable in the real world. It has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics. Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level. The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy—that is, to minimize fluctuations in growth and prices. Those policies can include spending and taxing actions by the government or monetary policy actions by the central bank.

Bridging the micro/macro divide
Like physical scientists, economists develop theory to organize and simplify knowledge about a field and to develop a conceptual framework for adding new knowledge. Science begins with the accretion of informal insights, particularly with observed regular relationships between variables that are so stable they can be codified into “laws.” Theory is developed by pinning down those invariant relationships through both experimentation and formal logical deductions—called models.

Since the Keynesian revolution, the economics profession has had essentially two theoretical systems, one to explain the small picture, the other to explain the big picture (micro and macro are the Greek words, respectively, for “small” and “big”). Following the approach of physics, for the past quarter century or so, a number of economists have made sustained efforts to merge microeconomics and macroeconomics. They have tried to develop microeconomic foundations for macroeconomic models on the grounds that valid economic analysis must begin with the behavior of the elements of microeconomic analysis: individual households and firms that seek to optimize their conditions.

There have also been attempts to use very fast computers to simulate the behavior of economic aggregates by summing the behavior of large numbers of households and firms. It is too early to say anything about the likely outcome of this effort. But within the field of macroeconomics there is continuing progress in improving models, whose deficiencies were exposed by the instabilities that occurred in world markets during the global financial crisis that began in 2008.

How they differ
Contemporary microeconomic theory evolved steadily without fanfare from the earliest theories of how prices are determined. Macroeconomics, on the other hand, is rooted in empirical observations that existing theory could not explain. How to interpret those anomalies has always been controversial. There are no competing schools of thought in microeconomics—which is unified and has a common core among all economists. The same cannot be said of macroeconomics—where there are, and have been, competing schools of thought about how to explain the behavior of economic aggregates. Those schools go by such names as New Keynesian or New Classical. But these divisions have been narrowing over the past few decades (Blanchard, Dell’Ariccia, and Mauro, 2010).

Microeconomics and macroeconomics are not the only distinct subfields in economics. Econometrics, which seeks to apply statistical and mathematical methods to economic analysis, is widely considered the third core area of economics. Without the major advances in econometrics made over the past century or so, much of the sophisticated analysis achieved in microeconomics and macroeconomics would not have been possible.

NAME: MAMAH FAITH OKWUKWE
REG NO: 2020/245317
DEPARTMENT: ECONOMICS
COURSE: ECO 102
EMAIL ADDRESS: mamahokwukwe24@gmail.com

The divide in Economics came into existence only after the Great Depression. It is divided into two categories which are microeconomics and macroeconomics.
Where microeconomics is the branch of economics that pertains to decisions made at individual level because it involves study of individuals and business decisions, macroeconomics looks at the decisions of countries and governments. Though these two branches of economics appear different, they are actually interdependent and complement one another.

FUNDAMENTAL PRINCIPLES OF MICROECONOMICS:
Since microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation. Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy, where patterns from everyday life are pieced together to correlate demand and supply. The study examines how the behaviours of individuals, households, and firms have an impact on the market.
In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources. Its key principles are:
DEMAND: The quantity of goods and services which consumers are willing and able to purchase at a given price at a particular point in time.
SUPPLY: The quantity of goods and services which producers are willing and able to offer for sale at alternative prices and at a given point in time. Prices are determined by the law of supply and demand (the invisible hand).
EQUILIBRIUM: This is the point where quantity of goods sold or bought equals price. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
PRODUCTION THEORY: This principle is the study of how goods and services are created or manufactured.
COSTS OF PRODUCTION: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
LABOUR ECONOMICS: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income. 
LAW OF DIMINISHING MARGINAL UTILITY: This law states that when a consumer consumes successive amount of a commodity, a point is reached where further consumption yields lesser satisfaction.
SUBSTITUTION AND ELASTICITY: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand

FUNDAMENTAL PRINCIPLES OF MACROECONOMICS:
As it is known that macroeconomics is a branch of economics that studies the behavior of a country and how its policies impact the economy as a whole, it analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?” “What causes unemployment?” “What factors lead to economic depression?”
Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities keep a close eye on monetary and fiscal policy. John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena.
It tries to find ways to maximize the standard of living and achieve economic growth. Macroeconomics studies the results from many different countries and how their policies compare. It analyzes the failures and successes of governments based on economic indicators and performance. Therefore, the Principles of macroeconomics are:
ECONOMIC OUTPUT: Macroeconomics studies the national output, or income, of a country. National economic output is the total value of all goods and services produced in an economy during a specific time period. Economists measure national output by calculating the gross domestic product (GDP), which is the market value of final goods and services that an economy produces during a specific period of time. Economists will use the term real GDP, which is GDP valued at a constant price level, to compare current output with past output. This comparison will let them know if the economy is growing, is stagnant, or is contracting.
UNEMPLOYMENT: Unemployment is the number of people who are not employed, but are willing, able, ready and seeking employment. Natural unemployment consists of the frictional and structural unemployment.
Actual unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.
ECONOMIC GROWTH: Economic growth is the increase in the capacity of the economy to produce more of goods and services as compared to the previous year. It can be calculated as the percentage increase in the GDP of a country.
INFLATION: Inflation is a rise in prices, which can be results in the decline of purchasing power over time. Inflation occurs when there is a broad increase in the prices of goods and services, not just of individual items; it means, you can buy less for 1naira today than you could yesterday. In other words, inflation reduces the value of the currency over time.
DEFLATION: When the overall price level decreases so that inflation rate becomes negative, it is called deflation. It is the opposite of the often-encountered inflation. A reduction in money supply or credit availability is the reason for deflation in most cases.

Macroeconomic principles affect all participants in an economy, including consumers, workers, producers and government.

Name: Nnamani Ronald Chinedu
Reg Number: 2020/243123
Department: Philosophy
Level: 100 level
Email: nnamanironaldchinedu@gmail.com

1. Macroeconomics: It is the study of the overall economy on a large scale.
The fundamental principles of Macroeconomics are:
A. Economic Output: It is the study of the goods and services which a national economy produces. This is the primary indicator considered in macroeconomics. It can be measured by the Gross Domestic Product (GDP) of a country.
B. National income: Macroeconomics analyses the wealth a nation generates. There are different measures for this, such as Gross National Product, Gross Domestic Product and Net National Income. These help to show a picture of the financial status of a nation.
C. International trade: This area of macroeconomics looks at the trade that occurs between nations, in terms of goods, services and raw materials. International trade is really important to the world economy.

2. Microeconomics: It is the study of how individuals and businesses make choices regarding the best use of limited resources.
The fundamental principles of microeconomics are:
A. Opportunity Cost: When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. A consumer who is also a decision maker, has limited resources (money) and unlimited options (opportunities) to use their resources.
B. Law of diminishing marginal utility: For maximizing consumer utility, this microeconomics idea is frequently applied. This law says that, the demand for a particular product decreases with each consecutive unit consumed by a customer.
C. Demand and supply: Suppliers might either increase supply or raise prices when demand outpaces supply overtime. When prices rise, demand declines as fewer people can afford them. In contrast, when supply outpaces demand, providers either need to reduce their supply or lower the pricing of the goods they sell.

Orajiaku Chidera Princewill
2020/242647
chideraprince44@gmail.com

Microeconomics is the study of how individuals and businesses make choices regarding the best use of limited resources. Its principles can be usefully applied to decision-making in everyday life—for example, when you rent an apartment. Most people, after all, have a limited amount of time and money. They cannot buy or do everything they want, so they make calculated microeconomic decisions on how to use their limited resources to maximize personal satisfaction.

Similarly, a business also has limited time and money. Businesses also make decisions that result in the best outcome for the business, which may be to maximize profit.

Microeconomics uses certain basic principles to explain how individuals and businesses make decisions. These are:

1) Maximizing utility—Maximizing utility means that individuals make decisions to maximize their satisfaction.

2) Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.

3) Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.

4) Supply and demand—Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

Macroeconomics is the study of large scale economic issues such as those which affect the entire economy. This is in contrast to Microeconomics which looks at smaller scale economic principles. Macroeconomics is a highly practical discipline as it deals with principles that directly impact every part of life. The economy has a knock on effect on almost every part of people’s lives as a nation’s economic well-being affects its employment, healthcare, consumer confidence and so forth.

1) National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.

2) Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.

3) Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.

4) International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

We economists look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example.

The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves microeconomists or macroeconomists. The American Economic Association recently introduced several new academic journals. One is called Microeconomics. Another, appropriately, is titled Macroeconomics.

Why the divide?

It was not always this way. In fact, from the late 18th century until the Great Depression of the 1930s, economics was economics—the study of how human societies organize the production, distribution, and consumption of goods and services. The field began with the observations of the earliest economists, such as Adam Smith, the Scottish philosopher popularly credited with being the father of economics—although scholars were making economic observations long before Smith authored The Wealth of Nations in 1776. Smith’s notion of an invisible hand that guides someone seeking to maximize his or her own well-being to provide the best overall result for society as a whole is one of the most compelling notions in the social sciences. Smith and other early economic thinkers such as David Hume gave birth to the field at the onset of the Industrial Revolution.

Economic theory developed considerably between the appearance of Smith’s The Wealth of Nations and the Great Depression, but there was no separation into microeconomics and macroeconomics. Economists implicitly assumed that either markets were in equilibrium—such that prices would adjust to equalize supply and demand—or that in the event of a transient shock, such as a financial crisis or a famine, markets would quickly return to equilibrium. In other words, economists believed that the study of individual markets would adequately explain the behavior of what we now call aggregate variables, such as unemployment and output.

The severe and prolonged global collapse in economic activity that occurred during the Great Depression changed that. It was not that economists were unaware that aggregate variables could be unstable. They studied business cycles—as economies regularly changed from a condition of rising output and employment to reduced or falling growth and rising unemployment, frequently punctuated by severe changes or economic crises. Economists also studied money and its role in the economy. But the economics of the time could not explain the Great Depression. Economists operating within the classical paradigm of markets always being in equilibrium had no plausible explanation for the extreme “market failure” of the 1930s.

If Adam Smith is the father of economics, John Maynard Keynes is the founding father of macroeconomics. Although some of the notions of modern macroeconomics are rooted in the work of scholars such as Irving Fisher and Knut Wicksell in the late 19th and early 20th centuries, macroeconomics as a distinct discipline began with Keynes’s masterpiece, The General Theory of Employment, Interest and Money, in 1936. Its main concern is the instability of aggregate variables. Whereas early economics concentrated on equilibrium in individual markets, Keynes introduced the simultaneous consideration of equilibrium in three interrelated sets of markets—for goods, labor, and finance. He also introduced “disequilibrium economics,” which is the explicit study of departures from general equilibrium. His approach was taken up by other leading economists and developed rapidly into what is now known as macroeconomics.

Coexistence and complementarity

Microeconomics is based on models of consumers or firms (which economists call agents) that make decisions about what to buy, sell, or produce—with the assumption that those decisions result in perfect market clearing (demand equals supply) and other ideal conditions. Macroeconomics, on the other hand, began from observed divergences from what would have been anticipated results under the classical tradition.

Today the two fields coexist and complement each other.

Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets. Much economic analysis is microeconomic in nature. It concerns such issues as the effects of minimum wages, taxes, price supports, or monopoly on individual markets and is filled with concepts that are recognizable in the real world. It has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics. Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level. The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy—that is, to minimize fluctuations in growth and prices. Those policies can include spending and taxing actions by the government or monetary policy actions by the central bank.

Bridging the micro/macro divide

Like physical scientists, economists develop theory to organize and simplify knowledge about a field and to develop a conceptual framework for adding new knowledge. Science begins with the accretion of informal insights, particularly with observed regular relationships between variables that are so stable they can be codified into “laws.” Theory is developed by pinning down those invariant relationships through both experimentation and formal logical deductions—called models.

Since the Keynesian revolution, the economics profession has had essentially two theoretical systems, one to explain the small picture, the other to explain the big picture (micro and macro are the Greek words, respectively, for “small” and “big”). Following the approach of physics, for the past quarter century or so, a number of economists have made sustained efforts to merge microeconomics and macroeconomics. They have tried to develop microeconomic foundations for macroeconomic models on the grounds that valid economic analysis must begin with the behavior of the elements of microeconomic analysis: individual households and firms that seek to optimize their conditions.

There have also been attempts to use very fast computers to simulate the behavior of economic aggregates by summing the behavior of large numbers of households and firms. It is too early to say anything about the likely outcome of this effort. But within the field of macroeconomics there is continuing progress in improving models, whose deficiencies were exposed by the instabilities that occurred in world markets during the global financial crisis that began in 2008.

How they differ

Contemporary microeconomic theory evolved steadily without fanfare from the earliest theories of how prices are determined. Macroeconomics, on the other hand, is rooted in empirical observations that existing theory could not explain. How to interpret those anomalies has always been controversial. There are no competing schools of thought in microeconomics—which is unified and has a common core among all economists. The same cannot be said of macroeconomics—where there are, and have been, competing schools of thought about how to explain the behavior of economic aggregates. Those schools go by such names as New Keynesian or New Classical. But these divisions have been narrowing over the past few decades (Blanchard, Dell’Ariccia, and Mauro, 2010).

Microeconomics and macroeconomics are not the only distinct subfields in economics. Econometrics, which seeks to apply statistical and mathematical methods to economic analysis, is widely considered the third core area of economics. Without the major advances in econometrics made over the past century or so, much of the sophisticated analysis achieved in microeconomics and macroeconomics would not have been possible.

Name: Obelu Victoria Obianuju
reg number: 2020/242907.
CSS /economics and philosophy.

Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level.

Microeconomics focuses on the actions of individual agents within the economy, like households, workers, and businesses; Macroeconomics looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports. Microeconomics and macroeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy.
Key principles of microeconomics include;
Pricing theory, income theory, consumer behavior theory, production theory, and marginal utility theory.
Key principles of macroeconomics include;
Economic output, economic growth, unemployment, inflation and deflation, and investment.

Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies. Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level.

Name:Mbibe Martha Queen
Reg No: 2020/242938
Department: Combined Social Science (Economics and political science)
The goal of microeconomics is to understand how the actions of consumers and producers affect price and output. Microeconomics focus on a single market and is very narrow compared to microeconomics. It overlooks factors like employment, inflation and recession. It has various fundamental principles such as scarcity,demand and supply, cost and benefits and incentives and consumer utility maximisation. The law of diminishing marginal utility is a microeconomics principles used for maximizing consumer’s utility. It plays a vital role in consumers decision when purchasing goods and services.

Macroeconomics focuses on changes in price level across all markets. It’s the study of large scale economic issues such as those that affect the entire economy. Some of the principles of macroeconomics are
-Inflation:This is how the costs of products rise as time goes on in a country. Modern economists have come to the conclusion that it’s better for inflation in a country to be kept at a low starry rate as it helps to negate the negative consequences of economic recession.
– International trade: it forms a large part of the nation’s income and is vital to world economy because some raw materials can only be found or produced in certain countries.
They are much more principles of macroeconomics such as Economic growth and output. We exist in a capitalist world and because we do it’s very important to understand the principles of macroeconomics as it is essential part of understanding the world at large.

Macro economics is a broad discipline which encompasses many separate areas of study. The Principles of Macro economics can broadly be grouped into two areas of concern – firstly, the effects of the business cycle on the wider economy and secondly, what causes an economy to grow over a long period of time.
Fundamental principles of macro economics are:
1. National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
2. Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
3. Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.

4. International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

(2) Microeconomics is entirely contradictory to macroeconomics. It is a narrower concept that focuses only on a single market or segment. This study only interprets the tiny components of the economy. The study states that the market attains equilibrium when the supply of goods controls the demand.

Fundamental principles of microeconomics are:
1. Demand and Supply: When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
2. Opportunity Cost: A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive.
3. Law of Diminishing Marginal Utility: This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
4. Income and Elasticity: As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

Name: Okechi Francis Uche
Department: Economics
Reg No: 2020/242648
Question: Fundamental Principles of Macro and Micro Economics

Discussion
Microeconomics is entirely contradictory to macroeconomics. It is a narrower concept that focuses only on a single market or segment. This study only interprets the tiny components of the economy. The study states that the market attains equilibrium when the supply of goods controls the demand.
The Principles of Microeconomics are:
1 – Demand and Supply
2 – Opportunity Cost
3 – Law of Diminishing Marginal Utility
4 – Giffen Goods
5 – Veblen Goods
6 – Income and Elasticity
7 – Substitution and Elasticity
Microeconomics Principles
Microeconomics follows the general principles of economics. Some of these are discussed below:
1 – Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
Finally, when both supply and demand are optimal, a state of equilibrium is achieved. The correlation between demand and supply and the state of equilibrium assumes that all other factors except price and demand remain constant.
2 – Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive.
Opportunity Cost Examples
It is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.

3 – Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.

4 – Giffen Goods
Giffen goods are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve is positively sloped.
Giffen Goods
For instance, the price rise of petrol doesn’t reduce its demand. In order to be considered Giffen Goods, products must fulfill some of the following criteria:
* A lack of substitute products.
* The substitute should be inferior.
* Amount spent on the product should be a major portion of the customer’s budget.
5 – Veblen Goods
Veblen Goods are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.

6 – Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
7 – Substitution and Elasticity
Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand.
Demand Elasticity
For example, if the price of leather jackets rises, consumers will prefer to buy woolen overcoats to shield themselves in winters.

Macroeconomics is the study of large scale economic issues such as those which affect the entire economy. This is in contrast to Microeconomics which looks at smaller scale economic principles. Macroeconomics is a highly practical discipline as it deals with principles that directly impact every part of life. The economy has a knock on effect on almost every part of people’s lives as a nation’s economic well-being affects its employment, healthcare, consumer confidence and so forth.
Macroeconomics is a broad discipline which encompasses many separate areas of study. The Principles of Macroeconomics can broadly be grouped into two areas of concern – firstly, the effects of the business cycle on the wider economy and secondly, what causes an economy to grow over a long period of time.
The Principles of Macroeconomics aim to analyze the many different factors that relate to the performance and structure of large, macro economies, such as the economy of a nation or the economy of the entire world.
Principles of Macroeconomics – A Basic Explanation of Key Principles
1. National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
2. Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
3. Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.
4. International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

Name:Ani Chinenye Christianah
Department :Philosophy
Reg no:2020/247806
Faculty of social sciences

Fundamental principles of macroeconomic and micro economics
First let’s define the two terms, Microeconomics and Macroeconomics. Microeconomics is the study of specific areas and markets of an economy, it is the study of economics at an individual, group or company level. While Macroeconomics is concerned with large scale or general economic factors such as interest rates and national productivity, it deals with the performance, structure, behaviour and decision making of an economy as a whole.
Let’s look at the fundamental principles of each economy. We go with Macroeconomics
First we have the National income, from the definition of macroeconomics we say that it is interested in the general economy of a nation, so in national income it analyses the income a nation generates.There are different measures for this which are Gross National Products, Gross Domestic product and Net National income. It looks at the value of goods and services produced by a nation in a year.
Another is International trade, this has to do with trades that occur between nations in terms of goods, services and raw materials. International Trade forms the larger part of a nation’s income as the world is obviously a far larger market place than a single nation.
And we have economic output which is the study of goods and services that a national economy produces.
Where the principles of microeconomics deals with the following.
Demand and Supply equilibrium, here prices are determined by the law of supply and demand in a competitive market, suppliers offer the same price demanded by consumers which in turn creates economic equilibrium.
Another principle is Production Theory, which shows how goods and services are produced and manufactured.
Also we have the principle of cost of production, here the price of goods and services is determined by the cost of the resources used during production.
And lastly there is the principle of labour economics which centres on workers and employees and tries to understand patterns of wages, employments and also income.
CONCLUSION
The rules in microeconomics flows from set of laws and theorems rather than beginning with empirical study like the Macroeconomics

Macroeconomics is very complicated, with many factors that influence it. These factors are analyzed with various economic indicators that tell us about the overall health of the economy.
Macroeconomic principles broadly focuses on three things—national output (measured by gross domestic product), unemployment, and inflation.

1)Gross Domestic Product (GDP)
Output, the most important concept of macroeconomics, refers to the total amount of goods and services a country produces, commonly known as the gross domestic product (GDP). This figure is like a snapshot of the economy at a certain point in time.
When referring to GDP, macroeconomists tend to use real GDP, which takes inflation into account, as opposed to nominal GDP, which reflects only changes in price. The nominal GDP figure is higher if inflation goes up from year to year, so it is not necessarily indicative of higher output levels, only of higher prices.

The one drawback of GDP is that information has to be collected after a specified time period has passed, a figure for the GDP today would have to be an estimate. GDP is nonetheless a stepping stone into macroeconomic analysis. Once a series of figures is collected over a period of time, they can be compared, and economists and investors can begin to decipher business cycles, which are made up of the periods alternating between economic recessions (slumps) and expansions (booms) that occur over time.

From there we can begin to look at the reasons why the cycles took place, which could be government policy, consumer behavior, or international phenomena among other things. Of course, these figures can be compared across economies as well. Hence, we can determine which foreign countries are economically strong or weak.

2)The Unemployment Rate
The unemployment rate tells macroeconomists how many people from the available pool of labor (the labor force) are unable to find work.
Macroeconomists agree when the economy witnesses growth from period to period, which is indicated in the GDP growth rate, unemployment levels tend to be low. This is because with rising (real) GDP levels, we know the output is higher and, hence, more laborers are needed to keep up with the greater levels of production.

3)Inflation as a Factor
The third main factor macroeconomists look at is the inflation rate or the rate at which prices rise. Inflation is primarily measured in two ways: through the Consumer Price Index (CPI) and the GDP deflator. The CPI gives the current price of a selected basket of goods and services that is updated periodically. The GDP deflator is the ratio of nominal GDP to real GDP.
If nominal GDP is higher than real GDP, we can assume the prices of goods and services has been rising. Both the CPI and GDP deflator tend to move in the same direction and differ by less than 1%.

Microeconomics: The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.
Microeconomics involves several key principles, including:

1)Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.

2)Production Theory: This principle is the study of how goods and services are created or manufactured.

3)Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.

4)Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.

Fundamentals of macroeconomics and microeconomics can be explained as follows:
Microeconomics studies the decisions of individuals and firms to allocate resources of production and exchange consumption.
Microeconomics has its focus on individuals perspective at a consumers level whereas macroeconomics is always out to find general perspectives at national level.
Macroeconomics has its fundamentals basis on:
1) what will be produced
2) how goods and services will be produced
3) who will get output
4) how will system accommodate change
5) In what way will the system promote progress
Meanwhile microeconomics has its fundamentals on
1) individuals decisions
2) supply and demand interaction in individual markets, allocation of resources of production in these individuals markets.

Name: Igboanugo Jacinta ugochukwu
Reg no:2020/243842
Dept. Education and Economic
should be clear by now that economics covers a lot of ground. That ground can be divided into two parts: Microeconomics focuses on the actions of individual agents within the economy, like households, workers, and businesses; Macroeconomics looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports. Microeconomics and macroeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy.

 economics, the micro decisions of individual businesses are influenced by whether the macroeconomy is healthy; for example, firms will be more likely to hire workers if the overall economy is growing. In turn, the performance of the macroeconomy ultimately depends on the microeconomic decisions made by individual households and businesses.

Microeconomics

What determines how households and individuals spend their budgets? What combination of goods and services will best fit their needs and wants, given the budget they have to spend? How do people decide whether to work, and if so, whether to work full time or part time? How do people decide how much to save for the future, or whether they should borrow to spend beyond their current means

Macroeconomics

What determines the level of economic activity in a society? In other words, what determines how many goods and services a nation actually produces? What determines how many jobs are available in an economy? What determines a nation’s standard of living? What causes the economy to speed up or slow down? What causes firms to hire more workers or to lay workers off? Finally, what causes the economy to grow over the long term?

An economy’s macroeconomic health can be defined by a number of goals: growth in the standard of living, low unemployment, and low inflation, to name the most important. How can macroeconomic policy be used to pursue these goals? Monetary policy, which involves policies that affect bank lending, interest rates, and financial capital markets, is conducted by a nation’s central bank. For the United States, this is the Federal Reserve. Fiscal policy, which involves government spending and taxes, is determined by a nation’s legislative body. For the United States, this is the Congress and the executive branch, which originates the federal budget. These are the main tools the government has to work with. Americans tend to expect that government can fix whatever economic problems we encounter, but to what extent is that expectation realistic? These are just some of the issues that will be explored in the macroeconomic chapters of this book.

NAME: AMAEFULE RAPHEAL IZUCHUKWU
DEPARTMENT: ECONOMICS
REG NO:2020/246139
COURSE: ECO 102 (PRINCIPLES OF ECONOMICS II)
EMAIL: amaefulerapheal2002@gmail.com

FUNDAMENTAL PRINCIPLES OF MICRO AND MACRO ECONOMICS

Economics can be grouped into two major divisions. These are micro-economics and macro-economics.
MICRO-ECONOMICS
Micro-economics refers to the branch of economics which deals with smaller units or components of the economy. It is concerned with the analysis of the basic decision making components of households, individuals, firms and governments, It relates to cost, output, production, pricing and marketing activities of households, firms and governments. Micro-economics uses a set of fundamental principles to make predictions about how individuals behave in certain situations involving economic or financial transactions. These principles include the law of supply and demand, opportunity costs and utility maximization.
•THE LAW OF SUPPLY
The law of supply states that, all things being equal, the higher the price, the higher the quantity of a commodity that will be supplied or the lower the price, the lower the quantity of the commodity that will be supplied. This law is often regarded as the second law of demand and supply. This law explains that when the price of a commodity is high in the market, more quantity of it will be supplied by the producer and vice versa.
•THE LAW OF DEMAND
The law of demand states that all things being equal, the higher the price, the lower the quantity of goods that will be demanded, or the lower the price, the higher the quantity of goods that will be demanded. This law is often regarded as the first law of demand and supply. It simply means that when the price of a commodity like yam, for instance, is high in the market, very few quantities of it will be demanded by the consumer and vice versa.
•OPPORTUNITY COST
Opportunity cost is an expression of cost in terms of forgone alternatives. It is the satisfaction of one’s want at the expense of another want. It refers to wants that are left unsatisfied in order to satisfy another more pressing need.
•UTILITY MAXIMIZATION
A consumer would want to achieve the greatest amount of satisfaction from the limited resources available to him. He can maximise total utility by reducing his expenditure on certain commodities whose increased consumption yields low satisfaction and increase expenditure on others which give him higher level of satisfaction.

MACRO-ECONOMICS
Macro-economics refers to the branch of economics which deals with larger units or aggregate of the economy. Macro-economics relates to large aggregates such national income, inflation, unemployment, balance of payment, etc. In summary, macro-economics deals with the broad aggregates in the economy. Basic macro-economics focuses on five (5) main principles, they are economic output, economic growth, unemployment, inflation and deflation, and investment.
•ECONOMIC OUTPUT
Economic output measures the value of all sales of goods and services. Economic output is the total value of all goods and services produced in an economy. It is a regular tool used in macroeconomic analysis to determine whether an economy is growing or contracting by comparing output during two different points in time. It is also used to compare the relative output between different countries. This sounds simple enough but in this way, it is the sum of the final purchases and intermediate inputs, therefore resulting in the double counting of intermediate purchases.
•ECONOMIC GROWTH
Economic growth is the process by which the productive capacity of an economy increases over a given period, leading to a rise in the level of the national income. When there is economic growth, it shows in the form of an increase in income level, an expansion in the labour force, an increase in the total capital stock of the country and a higher volume of trade and consumption. Economic growth can take place under conditions of mass unemployment.
•UNEMPLOYMENT
Unemployment is a situation in which persons of working age, able and willing to work are unable to find paid employment. In other words, unemployment refers to a situation in which people who are capable of working and who are qualified by age to work cannot find employment.
•INFLATION
Inflation is a persistent rise in the general price level of goods and services. Inflation occurs when the volume of purchases is permanently running ahead of production and too much money in circulation chasing too few goods. This may be caused by increase in demand, low production, increase in salaries, population increase, etc.
•DEFLATION
Deflation is the continuous fall in the price level of goods and services as a result of decrease in the volume of money in circulation. Since prices fall, the value of money rises during deflation. A given sum of money can purchase more goods and services. It should be noted that deflation is the opposite of inflation. It is caused by budget surplus, increase in bank rate, increase in production and increase in taxation.
•INVESTMENT
Investment is an expenditure on physical assets which are not for immediate consumption but for the production of consumer and capital goods and services. Investment has two (2) related meanings:
(I) It could mean the actual production of real capital in economic theory such as building of new factory, purchase of new vehicles, etc.
(ii) It could also mean, in financial term, the deposit of money in bank, purchase of stock or government securities, etc.

NAME: CHUKWU EMMANUEL CHIMEZIE
REG NO: 2020/242570
DEPARTMENT: ECONOMICS (MAJOR)
EMAIL: ajaegbuezebonaventure4@gmail.com

DEFINITION OF TERMS
MICROECONOMICS: It focuses on how the individual households, firms, government, and industry take their decisions and how they interact in different markets. Microeconomics looks at how households and businesses make decisions and behave in the marketplace.
MACROECONOMICS: Is the branch of economics studying the overall economy on a large scale. Macroeconomics means studying inflation, price levels, economic growth, national income, gross domestic product (GDP), and unemployment numbers. It deals with the forces and trends that affect the economy as a whole.

FUNDAMENTAL PRINCIPLES OF MICRO AND MACRO ECONOMICS
Microeconomics Principles:
1. Demand: Demand for a good means the amount of the good that buyers are willing and able to buy at various prices over a given period of time, all other factors affecting demand held constant. Buyers must support their willingness to buy with the ability to pay for the good. Note that demand for any good is measured over a given time period.
2. Supply: It means the amount of good that sellers are willing and able to offer for sale at various prices over a given period of time all things being equal.
3. Equilibrium: It is a situation in which the forces of demand and supply exactly balance each other. In such a situation the buyers and sellers are satisfied because they are unable to make a better decision given available resources and the actions of others.
The point of intersection of the demand curve and supply curve is known as Equilibrium. The equilibrium price is the price at which the quantity demanded equals the quantity supplied. In other words, at the equilibrium price, the quantity of the good that buyers are willing and able to buy exactly balances the quantity that sellers are willing and able to sell.

Macroeconomics Principles:
1. Economic Output: Macroeconomics studies the national output, or income, of a country. National economic output is the total value of all goods and services produced in an economy during a specific time period. Economists measure national output by calculating the gross domestic product (GDP), which is the market value of final goods and services that an economy produces during a specific period of time. Economists will use the term real GDP, which is GDP valued at a constant price level, to compare current output with past output. This comparison will tell you if the economy is growing, is stagnant, or is contracting. Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.
GDP is calculated in one of two ways:
Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually or quarterly.
2. Economic Growth: Economic growth is an increase in the production of economic goods and services in one period of time compared with a previous period. It can be measured in nominal or real (adjusted to remove inflation) terms. Traditionally, aggregate economic growth is measured in terms of gross national product (GNP) or gross domestic product (GDP), although alternative metrics are sometimes used. In economics, growth is commonly modeled as a function of physical capital, human capital, labor force, and technology.
3. Inflation: Can be defined as a general and persistent rise in prices. It is about a general increase in prices. The general price level refers to a measure of average price level in the economy as a whole. Inflation is an economy-wide phenomenon that concerns, first and foremost, the value of economy’s medium of exchange. Second the word “persistent” is important because it indicates a dynamic phenomenon that only makes sense over time. In other words, inflation is different from a once-and-for-all rise in the price level: it refers only to a continual rise in the price level over time.
4. Deflation: Is when consumer and asset prices decrease over time, and purchasing power increases. Essentially, you can buy more goods or services tomorrow with the same amount of money you have today. This is the mirror image of inflation, which is the gradual increase in prices across the economy.
While deflation may seem like a good thing, it can signal an impending recession and hard economic times. When people feel prices are headed down, they delay purchases in the hopes that they can buy things for less at a later date. But lower spending leads to less income for producers, which can lead to unemployment and higher interest rates.
5. Investment

MICROECONOMICS
Microeconomics deals with the smaller units within the economy. It is the aspect of economic analysis that studies decision-making processes by individuals, households and firms including how they make choice, how they interact in the market and how the government attempts to influence their choice.
Fundamental principles of microeconomics
1. Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost
2. Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
3. Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
4. Giffen Goods
This are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods.
5. Veblen Goods
Veblen goods are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.
6. Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
7. Substitution and Elasticity
Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand. For example, if the price of leather jackets rises, consumers will prefer to buy woolen overcoats to shield themselves in winters.

MACROECONOMICS
On the other hands, Macroeconomics, by contrast, deals with the total or aggregate economy. It studies the behaviour of the economy as a whole including unemployment, inflation or general price level, national income and economic growth.
Fundamental principles of Macroeconomics
1. National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
2. Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic
.3. recession.
Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.
4. International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.

Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.

Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.

For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.

Microeconomics involves several key principles, including (but not limited to):

Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.
The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study

Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”

Name: EGWIM CHINONSO THERESA
Department: ECONOMICS
Reg num: 2020/242593
Level:100 level
Email address: egwimtheresa2@gmail.com

MICROECONOMICS vs. MACROECONOMICS; FUNDAMENTAL PRINCIPLES
Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.

MICROECONOMICS
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.

Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.

Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.

For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.

Microeconomics involves several key principles, including (but not limited to):

Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.
The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.

MACROECONOMICS
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”

Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.

Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.

John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena. Some economists dispute his theories, while many Keynesians disagree on how to interpret his work.

INVESTORS and MICROECONOMICS vs. MACROECONOMICS
Individual investors may be better off focusing on microeconomics, but macroeconomics cannot be ignored altogether. Fundamental and value investors may disagree with technical investors about the proper role of economic analysis. While it is more likely that microeconomics will impact individual investments, macroeconomic factors can affect entire portfolios.

Warren Buffett famously stated that macroeconomic forecasts didn’t influence his investing decisions. When asked how he and partner Charlie Munger choose investments, Buffett said, “Charlie and I don’t pay attention to macro forecasts. We have worked together now for 54 years, and I can’t think of a time we made a decision on a stock, or on a company … where we’ve talked about macro.”

Buffett also has referred to macroeconomic literature as “the funny papers.”

John Templeton, another famously successful value investor, shared a similar sentiment. “I never ask if the market is going to go up or down because I don’t know, and besides, it doesn’t matter,” Templeton told Forbes in 1978. “I search nation after nation for stocks, asking: ‘Where is the one that is lowest priced in relation to what I believe it’s worth?’”

Can Macroeconomic Factors Affect My Investment Portfolio?
Yes, macroeconomic factors can have a significant influence on your investment portfolio. For example, the Great Recession of 2008–09 and accompanying market crash were caused by the bursting of the U.S. housing bubble and subsequent near-collapse of financial institutions that were heavily invested in U.S. subprime mortgages.

For another example of the effect of macro factors on investment portfolios, consider the response of central banks and governments to the pandemic-induced crash of spring 2020. Governments and central banks unleashed torrents of liquidity through fiscal and monetary stimulus to prop up their economies and stave off recession, which had the effect of pushing most major equity markets to record highs in the second half of 2020 and throughout much of 2021.

What Is a Global Macro Strategy?
A global macro strategy is an investment and trading strategy that centers around large macroeconomic events at a national or global level. “Global Macro” involves research and analysis of numerous macroeconomic factors, including interest rates, currency levels, political developments, and country relations.

What Is the Basic Difference Between Microeconomics and Macroeconomics?
Microeconomics is the study of how individuals and companies make decisions to allocate scarce resources. Macroeconomics is the study of an economy as a whole.

How Do Core Concepts of Microeconomics Such as Supply and Demand Affect Stock Prices?
Microeconomic concepts such as supply and demand affect stocks prices in two ways: directly and indirectly.

The direct effect can be gauged by the impact of demand and supply disequilibrium on stock prices. When demand for a stock exceeds supply at a given point in time because there are more buyers than sellers, the stock will rise; conversely, when supply exceeds demand because there are more sellers than buyers, the stock will fall.
The indirect effect is based on supply and demand for the underlying company’s products and services. If the company’s products are flying off the shelves because of robust demand, it may be on a probable strong earnings trajectory that would likely translate into a higher price for its stock. But if demand is sluggish and there is excess inventory (or supply) of its products, the company’s earnings may disappoint and the stock may slump.

Name: Amaechi Tochi Constant
Reg no: 2020/247525
Department: Economics/ Sociology and Anthropology
Email address: Constantamaecji23@gmail.com.
Topic: Fundamental principles of Macro and Micro Economics.
Definition of Macro-Economics: This is a branch of economics that studies how an overall economy- the markets, businesses, consumers and government behave.
It also focuses on the performance of economics- changes in economic output, inflammation, interest and foreign exchange rates, and the balance of payments.
Definition of Micro-Economics: This is a branch of mainstream economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interaction amomg these individuals and firms.
Fundamental principles of Macro and Micro economics.
Micro-Economics
i. Micro-Economics analysis offers insight into such disparate efforts as making business decisions or formulating public policies.
ii. Micro-Economics focuses om supply and demand and other forces that determine price levels, making it a bottom up approach.
iii. Pricing theory.
iv. Income theory.
v. Consumer behavior theory.
vi. Production theory.
vii. Marginal utility theory.
Macro-Economics
i. Macro-Economics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend. Such as national income, savings and the overall price level.
ii. Macro-Economics takes a top-down approach amd looks at the economy as a whole, trying to determine its course and nature.
iii. Economic output: Macro-Economics studies the national output, or income of a country. E.g. National economic output is the total value of all goods and services produced in an economy during a specific period of time. Its the primary i dictator considered in macroeconomics and is measured by the gross domestic products (GDP) of a country or region.
iv. Economic growth: This is measured by comparing GDP over time.
v. Unemployment: This is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment.
vi. Inflation and deflation.
vii. Investment.

Onyelonu Chidire Victory
2020/246205
Combined social sciences (Economics and Psychology)

The Fundamental Principles of Micro and Macro Economics as an Emerging Economist

Microeconomics is the study of how individuals and businesses make choices regarding the best use of limited resources. Its principles can be usefully applied to decision-making in everyday life—for example, when you rent an apartment. Most people, after all, have a limited amount of time and money. They cannot buy or do everything they want, so they make calculated microeconomic decisionson how to use their limited resources to maximize personal Satisfaction.

Similarly, a business also has limited time and money. Businesses also make decisions that result in the best outcome for the business, which may be to maximize profit. 

The field of microeconomics interests investors because individual consumer spending accounts for roughly 68%, or about two-thirds, of the U.S. economy.1 Microeconomics and macroeconomics (the study of the larger aggregate economy) together make up the two main branches of economics.2
Some Principles of Microeconomics as an Emerging Economist
Before using microeconomics to understand its use in renting an apartment, it helps to understand some fundamentals. Microeconomics uses certain basic principles to explain how individuals and businesses make decisions. These are:
1. Maximizing utility—Maximizing utilitymeans that individuals make decisions to maximize their satisfaction.
2. Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.
3. Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.
4. Supply and demand—Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

Macroeconomics is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture – it analyzes the entire economy.What are the Principles of Macroeconomics?
Basic macroeconomics focuses on five main principles. So, what does macroeconomics study? The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.
Some principles of Macroeconomics as an emerging economist
1. Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:
Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually or quarterly.
Aggregate demand and supply create the model to determine the total economic output.
2.Economic Growth
Economic growth is measured by comparing GDP over time. This is calculated with the basic formula: GDP2−GDP1GDP1GDP2−GDP1GDP1
It is important that the earlier GDP is the GDP1GDP1. This will show if the growth is positive or negative.
3. Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.
Actual unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.
The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers. The formula for the labor participation rate is a bit different because it only considers the civilian workforce. The labor participation rate is found by dividing the total civilian population available for work divided by the number of those people who are working or seeking work. Both the unemployment rate and the labor participation rate can be used to measure unemployment.

Eco 102 Economists look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services. In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example. Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets. Much economic analysis is microeconomic in nature. It concerns such issues as the effects of minimum wages, taxes, price supports, or monopoly on individual markets and is filled with concepts that are recognizable in the real world. It has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics. Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies. Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level. The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy—that is, to minimize fluctuations in growth and prices. Those policies can include spending and taxing actions by the government or monetary policy actions by the central bank.

NAME: ONYEJE CHIDUMEBI ONYINYECHI
DEPARTMENT: ECONOMICS
REG NO: 2020/242644

FUNDAMENTAL PRINCIPLES OF MICRO AND MACRO ECONOMICS

Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

The Principles of Macroeconomics:

Basic macroeconomics focuses on five main principles.The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

1. Economic Output

Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:

• Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.

• Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.

Governments typically release their GDP either annually or quarterly.

2. Unemployment

Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.

• Cyclical unemployment relates to changes in business cycles.

• Frictional unemployment relates to when people are actively searching for a job.

• Structural unemployment relates to job elimination because of economic structural .

3.Inflation and deflation :

Inflation is a situation in an economy where prices of goods and services increase and the purchasing power of people decreases. Whereas, in deflation, there is a downward movement of the general price level of goods and services.   

Deflation is a phenomenon, which is exactly the opposite of inflation. When deflation occurs, the prices of goods and services fall which in turn increases the purchasing power of the money. It also means that more goods and services can be bought with the same amount of money.

Microeconomics Principles

Microeconomics follows the general principles of economics. Some of these are discussed below:

1. Demand and Supply

When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.

Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.

2. Opportunity Cost

A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive.

 
3. Law of Diminishing Marginal Utility

This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer.

4. Giffen Goods:

Giffen goods are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve is positively sloped.

Eco 102
Economists look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example.
Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets. Much economic analysis is microeconomic in nature. It concerns such issues as the effects of minimum wages, taxes, price supports, or monopoly on individual markets and is filled with concepts that are recognizable in the real world. It has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics. Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level. The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy—that is, to minimize fluctuations in growth and prices. Those policies can include spending and taxing actions by the government or monetary policy actions by the central bank.

NAME: IZUKANNE CHIBUZOR ABIGAIL
DEPARTMENT: COMBINED SOCIAL SCIENCE (ECONOMICS/PSYCHOLOGY)
REG NO. :2020/242981

Economics is divided into two categories: Macroeconomics and microeconomics.
Macroeconomics is concerned with how the overall economy works. It studies such things as employment, gross domestic product and inflation, while microeconomics is the study of individuals and business decisions.
Though this branches appears different, they complement one another and are actually interdependent.
MICROECONOMICS
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations and government legislation.
Microeconomics focuses on demand and supply and other forces that determine price level in the economy. In other words, microeconomics tries to understand human choices, decisions and allocation of resources.
Thus, microeconomics does not try to answer or explain what forces should take place in the market. Rather, it tries to explain what happens when there are changes in certain conditions.
Microeconomics involves several key principles, including (but not limited to):
1) Demand, Supply and Equilibrium
2) Production Theory
3) Costs of Production
4) Labour Economics

MACROECONOMICS
Macroeconomics studies the behavior of a country and how it policies impact the economy as a whole. It analyzes the entire industries and economies, rather than individuals or specific companies, which is why it is a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”
Macroeconomics analyzes how an increase or decrease in net export impacts a nation’s capital account or how gross domestic product (GDP) is impacted by unemployment rate.
Macroeconomics focuses on aggregate and econometric correlations, which is why government agencies relies on macroeconomics to formulate economic and fiscal policy.
John Maynard Keynes is often is often credited as the father of macroeconomics as he initiated the use of monetary aggregates to study broad phenomena.

Ugwuada mmadukaihe Samuel
Reg.no. 2020/243116
Department: philosophy

fundamental of Macroeconomics and Microeconomics

Microeconomics deals with individuals whereas macroeconomics deals with the economy as a whole entity consisting of collective individual units.

Macroeconomics uses aggregate demand and aggregate supply to explain it’s concepts whereas microeconomics employs demand and supply.

Macroeconomics focuses on the determination of income and employment in the economy, on the other hand, microeconomics aims at the determination of the price of a good or service and factors of production.

In macroeconomics, the degree of aggregation is highest because while dealing with the general aspects of the economy, factors have to be aggregated completely. On the other side, the degree of aggregation in microeconomics is limited.

Macroeconomics is known as income theory. Microeconomics is also termed as price theory.

It can be easily observed that micro and macroeconomics differ on the application of economic theory to two different scales. Despite all these differences, both of these are not mutually exclusive of each other. Macroeconomics is the aggregation of economic behaviour by individual units. Microeconomic aspects can change with changes in macroeconomic aspects and vice versa.

NAME; IROEGBU RACHAEL NWANGAJI
REG NO; 2020/244930
DEPT: ECONOMICS
EMAIL; iroegburachael@gmail.com
100 LEVEL CONTINOUS ASSESSMENT.

ANSWERS.
Microeconomics focuses on supply and demand majorly, including forces that determine price levels. It deals with how market prices affect individual demands and supply.
It focuses on;
-Pricing theory.
-Income theory.
-Consumer behaviour.
-Production behaviour.
-Marginal utility theory, etc.
It focuses on determination of income and employment in the economy.

Macroeconomics looks at the economy as a whole. It is broader and encompasses elements in Microeconomics, but at a more advanced stage. It includes such elements as;
-Economic input.
-Economic growth.
-Unemployment.
-Inflation/Deflation.
-Investment

In conclusion, Microeconomics deals with ground level Economic elements while Macroeconomics involves the broader and overall economic elements and how they affect national-level Economic welfare.

Name: Ekwe Okwuchukwu Cletus
Reg. No: 2020/242587
Email Address: okwuchukwuekwe@gmail.com
a.) Microeconomics involves several key principles including:
– Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
– Production Theory: This principle is the study of how goods and services are created or manufactured.
– Costs of Production: According to this theory,the price of goods and services is determined by cost of the resources used during production.
– Labor Economics: This principle looks at workers and employers,and tries to understand patterns of wages, employment,and income.

b.) Basic macroeconomics focuses on five main principles and the includes:
– Economic output: Economic output is the primary indicator considered in macroeconomics. it is measured by the Gross Domestic Product (GDP)
of a country or region.
– Economic Growth: Economic Growth is measured by comparing GDP over time. This will show if the growth is positive or negative.
– Unemployment: Unemployment is also a major macroeconomics variable. Unemployment is the number of people who are not employed,but are seeking for employment. It does not include those not looking for work,such as children, retired people,and disabled people.
– Inflation: Inflation refers to a general increase in the prices of goods and services in an economy. When the general price level rises,each unit of a currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.
– Deflation: Deflation is when prices of goods and assets decrease over time,and purchasing power increases.

Name Obasi chidera Godwin
Dept economic major
2018/250687

The fundamental principles of the microeconomics are concerned with how the producers and consumers ensure maximum economic welfare through rational decision-making. Companies use this study to ensure resource utilization, competitive pricing, optimized production, and an uninterrupted supply of goods. Based on this theory, governments change taxes, subsidies grant and other advances..
Microeconomics primarily comprises the pricing theory, income theory, consumer behavior theory, production theory, and Marginal utility theory This analysis predicts a future possibility based on the buying decisions of businesses, individuals, and governments. It is entirely contradictory to macro economics.
Microeconomics does have its drawbacks. It is limited to a specific industry or market. It ignores crucial Economic factors like aggregate demand and aggregate supply

The fundamentals principle of macroeconomic policy are concerned With study of human behavior and overlooks aggregate factors like GFP, employment, inflation, and recession.The various concepts studied under the macroeconomics discipline include production theory, consumer behavior theory, pricing theory, marginal utility theory, and income theory.It covers determination of gross domestic product, investment, consumption, employment, and unemployment. It also covers analysis of interest rates, wage rates, and inflation. Finally, it examines the roles of fiscal and monetary policies.

Name:Nome chisom dorathy
Reg No :2020/245247
Email address: chisomnome16@gmail.com

Answers
Microeconomics Principles
Microeconomics follows the general principles of economics. Some of these are discussed below:
1 – Demand and Supply:When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand. Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.microeconomicsFinally, when both supply and demand are optimal, a state of equilibrium is achieved. The correlation between demand and supply and the state of equilibrium assumes that all other factors except price and demand remain constant.
#2 – Opportunity Cost:A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive. Opportunity Cost Examples You are free to use this image on your website, templates, etc., Please provide us with an attribution link it is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.
#3 – Law of Diminishing Marginal Utility:This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
#4 – Giffen Goods:Giffen goods are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve is positively sloped. Giffen Goods For instance, the price rise of petrol doesn’t reduce its demand. In order to be considered Giffen Goods, products must fulfill some of the following criteria:A lack of substitute products The substitute should be inferior. Amount spent on the product should be a major portion of the customer’s budget.
#5 – Veblen Goods are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.
#6 – Income and Elasticity: As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
#7 – Substitution and Elasticity substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand. Demand Elasticity You are free to use this image on your website, templates, etc., Please provide us with an attribution link For example, if the price of leather jackets rises, consumers will prefer to buy woolen overcoats to shield themselves in winters.

Macroeconomics principles
Basic macroeconomics focuses on five main principles. The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.
Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:
Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Economic Growth
Economic growth is measured by comparing GDP over time. This is calculated with the basic formula:GDP2-GDP1/GDP1
It is important that the earlier GDP is the GDP1
. This will show if the growth is positive or negative.
Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.
Actual unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.
The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers. The formula for the labor participation rate is a bit different because it only considers the civilian workforce. The labor participation rate is found by dividing the total civilian population available for work divided by the number of those people who are working or seeking work. Both the unemployment rate and the labor participation rate can be used to measure unemployment.

AMARA MARVELOUS EZEILO
2020/245138
Macroeconomics is the study of large scale economic issues such as those which affect The Principles of Macroeconomics can broadly be grouped into two areas of concern – firstly, the effects of the business cycle on the wider economy and secondly, what causes an economy to grow over a long period of time.

Principles of Macroeconomics
* National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
* Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
* Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.
* International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

Microeconomics Definition
Microeconomics is a ‘bottom-up’ approach where patterns from everyday life are pieced together to correlate demand and supply. The study examines how the behaviors of individuals, households, and firms have an impact on the market.
Microeconomics Principles
1 – Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold.
2 – Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost
3 – Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer.
4 – Giffen Goods
are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype.
5 – Veblen Goods
are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.
6 – Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
7 – Substitution and Elasticity
Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand

Name; Ogechukwu Uzoigwe
Reg number; 2020/242627
Department; economics

Microeconomics is the study of how individuals and businesses make choices regarding the best use of limited resources. Its principles can be usefully applied to decision-making in everyday life—for example, when you rent an apartment. Most people, after all, have a limited amount of time and money. They cannot buy or do everything they so they make microeconomic decisions on how to use their limited resources to maximize personal satisfaction.

Similarly, a business also has limited time and money. Businesses also make decisions that result in the best outcome for the business, which may be to maximize profit. 
 Microeconomics and macroeconomics study of the larger aggregate economy) together make up the two main branches of economics.

 Macroeconomics is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture – it analyzes the entire economy.

Macroeconomic study focuses on three broad areas and the interrelationships between them. These three concepts affect all participants in an economy, including consumers, workers, producers and government.

Macroeconomics studies the national output, or income, of a country. National economic output is the total value of all goods and services produced in an economy during a specific time period. Economists measure national output by calculating the gross domestic product (GDP), which is the market value of final goods and services that an economy produces during a specific period of time. Economists will use the term real GDP, which is GDP valued at a constant price level, to compare current output with past output. This comparison will tell you if the economy is growing, is stagnant, or is contracting.
The basic model used in macroeconomics to study economic fluctuations is the model of aggregate demand and aggregate supply. The model involves two variables: the economy’s output, which is measured by real GDP, and the economy’s overall price level, measured by a price index (usually the GDP deflator or CPI). You can plot the general price level in an economy on the vertical axis of a graph and the quantity of output on the horizontal axis. The aggregate supply curve is upward sloping in the short-run, but vertical in the long-run. The aggregate demand curve is downward slopping. Economic output and price level will move towards the point where aggregate supply equals aggregate demand.

Name: Okoye Ogechim Yegra-owo
Dept: Combined Social Science ( Economics and Political science)
Reg No:2020/242986

They are various different fundamental principles of macro and micro economics.

Macro Economics is the study of large scale economic issues that affect the entire economy. It is a highly practical discipline as it deals with principles that directly impact every part of our life . The principles of macroeconomics aim to analyse the different factors that relate to the performance of the economy of a nation. Some of the principles are as follows
a) Economic Output: it studies the goods and services that a country produces
b) National Income: It analyses the wealth a country generates yearly
c) Inflation and Deflation:The gradual increase or decrease in the price of goods and services
d) Unemployment, international trade, investment, economic growth.
These principles are fundamental mostly because they directly impact almost every area of life. Macroeconomics explores the effects of exchange rates in a country’s economy and the economics of its trading partners.
Microeconomics is quite the opposite of macroeconomics as it focuses on the financial dealings of individuals. It uses a set of fundamental principles such as the law of supply and demand, opportunity costs and utility maximisation to make predictions about how individuals behave in certain situations involving economic and financial transactions. It’s also studies firm profit maximisation, output optimization,consumer utility maximisation and consumer optimization.
a) Demand and supply: this helps determine prices for a product or service with higher demand and limited supply typically making for higher prices.
b) Utility maximisation: Individuals make various decisions that help to maximize their satisfaction.

Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach. while Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine its course and nature
Microeconomics deals with individuals whereas macroeconomics deals with the economy as a whole entity consisting of collective individual units.
Macroeconomics uses aggregate demand and aggregate supply to explain it’s concepts whereas microeconomics employs demand and supply.
Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies. Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level.

Name: Omeje Deborah Mmesoma
Reg no: 2020/242625
Department : Economics

Some Principles of Microeconomics

Before using microeconomics to understand its use in renting an apartment, it helps to understand some fundamentals. Microeconomics uses certain basic principles to explain how individuals and businesses make decisions. These are:

Maximizing utility—Maximizing utility means that individuals make decisions to maximize their satisfaction. Example, to rent an apartment, first you must determine a budget. For this you will have to take into account your income and how much money you are looking to spend on housing, in such a way as to maximize your utility or satisfaction. If you allocate too much of your income to rent, you will limit the money you have left for other expenses. Thus, you will have to decide what amount of money is the maximum you are willing to part with for rent, what amenities you must have in your apartment, and which neighborhoods are acceptable to you. All of these decisions and calculations are about maximizing utility.
Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost. Examples Based on all the above factors, you set a budget to get the most satisfaction for the least possible rent. You will not pay more than you have to in order to get what you want. Given that in this supply-constrained market there are others also interested in renting the more in-demand apartments, you might find that you will have to increase your budget. To do this you will have to cut down on spending in another area, such as entertainment, travel, or eating out. That is the opportunity cost of finding the right apartment.
Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.

Supply and demand—Two other smportant economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices. Examples,similarly, a landlord will seek to rent an apartment at the highest price possible, as their motivation generally is to get the best return from renting out the apartment. In setting the rent, the landlord would have to take into account the demand for the apartment in that specific neighborhood. If there are enough potential renters interested in the apartment, the landlord would set a higher rent. If the rent is set too high, compared with what other landlords in the neighborhood are charging for comparable apartments, renters will not be interested. Thus the business owner, in this case the landlord, also makes decisions based on supply and demand.

The Bottom Line
In a capitalist economy, both consumers and businesses make thousands of big and small decisions each year guided by microeconomic issues. Consumers seek to maximize their satisfaction when they go out and shop for anything from paper towels to apartments, houses, and cars. Businesses set prices and make other decisions based on microeconomics. The prices that consumers will pay depends on the supply of a specific good, such as an apartment, as well as how much others are willing to pay for it.

Principles of macro economics are

National income: these analyses the wealth a nation generates. There are different measures
for this such as GNP, GDP, and NNP. The underlying purposes of all of these is to paint a picture
of the financial health of a nation. This is used in looking at the value of goods and services
produced by a nation over the course of a year.

Inflation: This is the study of how the cost of goods and services rises as time goes on. For
example, if a car cost 1000 more in a given year than it did ten years previously, that would be a
case of inflation. These help negates the negative consequences of economic recession.

Economic output: this is the study of the goods and services which a national economy
produces. A high output is desirable as the more money that is spent on a nation’s goods and
services the more benefit this holds for a country due to the fact that more people will be in
employment and greater tax revenue will be raised.

International trade: this area of macro economics looks at the trade that occurs between
nations in terms of goods, services, and raw materials. This often forms a larger part of a
nation’s income as the world is obviously a far larger market place than a single nation.

The two types of economy in economics is two namely:
microeconomics and macroeconomics.
macroeconomics, studies how a country’s economy works, while trying to discern among good, better, and best choices for improving and maintaining a nation’s standard of living and level of economic and societal well-being. Historical and contemporary perspectives on the role of government policy surround questions of who gains and loses within a small set of key interdependent players.
These beneficiaries include households, consumers, savers, firm owners, investors, government officials, and global trading partners.
Consider how microeconomists and macroeconomists analyze price fluctuations.
In microeconomics, we focus on how supply and demand determine prices in a given market. In macroeconomics, we focus on changes in the price level across all markets. Microeconomics studies firm profit maximization, output optimization, consumer utility maximization, and consumption optimization. Macroeconomics studies economic growth, price stability, and full employment.

Macroeconomic performance relies on measures of economic activity, such as variables and data at the national level, within a specific period of time. Macroeconomics analyzes aggregate measures, such as national income, national output, unemployment and inflation rates, and business cycle fluctuations. In this course, we prompt you to think about the national and global issues we face, consider competing views, and draw conclusions from various perspectives, tools, and alternatives

NAME:OKWUDILI ESTHER MMESOMA
REG.NO: 202/242613
DEPARTMENT: ECONOMICS
GMAIL: estherokwudili20@gmail.com

THE PRINCIPLES OF MICROECONOMICS
Microeconomics follows the general principles of economics. Some of these are discussed below:
1) DEMAND AND SUPPLY.
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.

Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply. Finally, when both supply and demand are optimal, a state of equilibrium is achieved. The correlation between demand and supply and the state of equilibrium assumes that all other factors except price and demand remain constant.
2) OPPORTUNITY COST.
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive. It is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.
3) LAW OF DIMINISHING MARGINAL UTILITY.
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
4) GIFFEN GOODS.
Giffen goods are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve is positively sloped. For instance, the price rise of petrol doesn’t reduce its demand. In order to be considered Giffen Goods, products must fulfill some of the following criteria:
a. A lack of substitute products
b. The substitute should be inferior.
c. Amount spent on the product should be a major portion of the customer’s budget.
5) VEBLEN GOODSD.
Veblen Goods
are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.
6) INCOME AND ELASTICITY.
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.
7) SUBSTITUTION AND ELASTICITY.
Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand. For example, if the price of leather jackets rises, consumers will prefer to buy woolen overcoats to shield themselves in winters.

THE PRINCIPLES OF MACROECONOMICS.
Macroeconomics is a broad discipline which encompasses many separate areas of study. The Principles of Macroeconomics can broadly be grouped into two areas of concern – firstly, the effects of the business cycle on the wider economy and secondly, what causes an economy to grow over a long period of time. The Principles of Macroeconomics aim to analyze the many different factors that relate to the performance and structure of large, macro economies, such as the economy of a nation or the economy of the entire world. They includes:
1) NATIONAL INCOME.
The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
2) INFLATION.
Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
3) ECONOMIC OUTPUT.
This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.
4) INTERNATIONAL TRADE.
This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

.

The fundamental principles of macro and micro economics

Fundamental principles of macro economics
The fundamental principles of macro economics includes the followings:
1. National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.

2. Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.

3. Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.

4. International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.

5. Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.

Fundamental principles of micro economics
The micro economics fundamental principles includes the followings

1 – Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
Finally, when both supply and demand are optimal, a state of equilibrium is achieved. The correlation between demand anddemand remain constant.

2 – Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost. This is with the assumption that the choices are mutually exclusive.

3 – Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.

4 – Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

Economists also look at two realms. There is big-picture
macroeconomics, which is concerned with how the overall
economy works. It studies such things as employment, gross
domestic product, and inflation—the stuff of news stories and
government policy debates. Little-picture microeconomics is
concerned with how supply and demand interact in individual
markets for goods and services.
In macroeconomics, the subject is typically a nation—how
all markets interact to generate big phenomena that economists
call aggregate variables. In the realm of microeconomics, the
object of analysis is a single market—for example, whether price
rises in the automobile or oil industries are driven by supply or
demand changes. The government is a major object of analysis
in macroeconomics—for example, studying the role it plays in
contributing to overall economic growth or fighting inflation.
Macroeconomics often extends to the international sphere
because domestic markets are linked to foreign markets through
trade, investment, and capital flows. But microeconomics can
have an international component as well. Single markets often
are not confined to single countries; the global market for
petroleum is an obvious example.
The macro/micro split is institutionalized in economics, from
beginning courses in “principles of economics” through to post-
graduate studies. Economists commonly consider themselves
microeconomists or macroeconomists.

Microeconomics studies firm profit maximization, output optimization, consumer utility maximization, and consumption optimization. Macroeconomics studies economic growth, price stability, and full employment.

Macroeconomic performance relies on measures of economic activity, such as variables and data at the national level, within a specific period of time. Macroeconomics analyzes aggregate measures, such as national income, national output, unemployment and inflation rates, and business cycle fluctuations

What are the Principles of Macroeconomics? Basic macroeconomics focuses on five main principles. So, what does macroeconomics study? The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.
Microeconomics uses a set of fundamental principles to make predictions about how individuals behave in certain situations involving economic or financial transactions. These principles include the law of supply and demand, opportunity costs, and utility maximization.

Name: UBAH VIVIAN CHIOMA
Dept: SOCIAL SCIENCE EDUCATION (education economics)
Reg. No :2020/243849

The fundamental principles of macro and micro economics

Macroeconomics is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these.

Microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture

The Principles of Macroeconomics- The five fundamental principles are:
economic output,
economic growth,
unemployment,
inflation and deflation, and
investment.

Economic Output: Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways: Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation. While the other is Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.

Economic Growth: Economic growth is measured by comparing GDP over time. This is calculated with the basic formula: GDP2-GDP1/GDP1
It is important that the earlier GDP is the GDP1. This will show if the growth is positive or negative.

Unemployment: Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people.

Inflation and deflation: inflation occurs when the prices of goods and services rise, while deflation occurs when those prices decrease. The balance between these two economic conditions, opposite sides of the same coin, is delicate and an economy can quickly swing from one condition to the other.

Investment: An investment is an asset that is intended to produce income or capital gains.Investing is the act of using currently-held money to buy assets in the hopes of appreciation. Investing is a way to build wealth in the future.

The principle of microeconomics
Microeconomics uses certain basic principles to explain how individuals and businesses make decisions. These are:
Maximizing utility
Opportunity cost
Diminishing marginal utility
Supply and demand

Maximizing utility—Maximizing utility means that individuals make decisions to maximize their satisfaction.

Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.

Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.

Supply and demand—Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.



Name: Agbo Emmanuel Chukwuemeka.
Reg no: 2020/242571.
Dept: Economics department.

The principles of microeconomics and macroeconomics:

Macroeconomics is the study of economics involving that that affects the economy including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics analyzes the entire economy.

The Principles of Macroeconomics
1)economic output
2)economic growth
3)unemployment
4)inflation and deflation and
5)investment.
Economic output: Economic output is the primary indicator of macroeconomics, It is measured by the gross domestic product (GDP) of a country or region, GDP is calculated in one of two ways: e.g Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Economic Growth: Economic growth is measured by comparing GDP over time.
Unemployment: This is the number of people who are not employed, but are seeking employment. It doesn’t include those that are not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types which are
Cyclical unemployment; relates to changes in business cycles.
Frictional unemployment; relates to when people are actively searching for a job. The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers.
investment: The government should provide machinery for different kinds of production and provided housing for people, the government can equally invest drastically in Education in other to build a civilized and advance economy.

Microeconomics is the study of individual and business decisions regarding the allocation of resources and prices of goods and services. The term also considered taxes, regulations, and government legislation. It doesn’t try to explain which actions should take place in a market, but rather the effects of changes in certain conditions. Microeconomics has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics.

Key Principles of Microeconomics:
One of the microeconomics’ core principles involves demand, supply, and equilibrium, as they collectively influence prices. Another principle involves production theory, which explores how goods and services are created or manufactured. A third principle involves the costs of production, which ultimately determine the price of goods and services. Finally, the principle of labor economics attempts to explain the relationship between wages, employment, and income.

OGBODO EUNICE IFEBUCHE, 2020/244990
Ogbodo695@gmail..
*Fundamental principles of micro economics
These principle include the law of supply and demand, opportunity costs and utility maximization. It is the branch of economics that pertains to decisions made at the individual level such as the choices individual consumers make. It perspective focuses on parts of the economy; individuals, firm and industries..
Maximizing utility—Maximizing utility means that individuals make decisions to maximize their satisfaction.
Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.
Diminishing marginal utility—Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.
Supply and demand—Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.
*Fundamental principles of macro economics:
Macroeconomics focuses on how the entire economy functions. It tries to find ways to maximize the standard of living and achieve economic growth. There are many changes and variables that affect the entire economy. These include, but aren’t limited to: unemployment, productivity, inflation, and other economic indicators. Macroeconomics studies the results from many different countries and how their policies compare. It analyzes the failures and successes of governments based on economic indicators and performance
Economic Growth
Economic growth is measured by comparing GDP over time. This is calculated with the basic formula…
Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.

Name: Nsofor Ekperebuike Leonard
Registration number: 2020/242605
Email:nsoforekperebuikeleonard@gmail.com
Answer

Macroeconomics is the study of economics involving that that affects the economy including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics analyzes the entire economy.

The Principles of Macroeconomics
1)economic output
2)economic growth
3)unemployment
4)inflation and deflation and
5)investment.
Economic output: Economic output is the primary indicator of macroeconomics, It is measured by the gross domestic product (GDP) of a country or region, GDP is calculated in one of two ways: e.g Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Economic Growth: Economic growth is measured by comparing GDP over time.
Unemployment: This is the number of people who are not employed, but are seeking employment. It doesn’t include those that are not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types which are
Cyclical unemployment; relates to changes in business cycles.
Frictional unemployment; relates to when people are actively searching for a job. The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers.
investment: The government should provide machinery for different kinds of production and provided housing for people, the government can equally invest drastically in Education in other to build a civilized and advance economy.

Principles of Microeconomics
1) Maximizing utility
2)Supply and demand
3)Opportunity cost
4)Diminishing marginal utility
Maximizing utility: utility Maximization means that individuals make decisions to reduce cost of purchase and increase their satisfaction or make the satisfaction driven from a commodity equal the price.
Supply and demand: Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. Supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices
Opportunity cost: This is the cost of the foregone commodity not purchased.
Diminishing marginal utility: Diminishing marginal utility describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a piece of cake, for example, you may feel very satisfied, but if you eat a second piece, you may feel less satisfaction than you experienced with the first cake.

NAME: Umezulike Treasure Mmesoma
REG NO: 2020/242631
DEPARTMENT: Economics
EMAIL: umezuliketreasure@gmail.com

Fundamental Principles of Macro and Micro Economics Includes:

MACRO ECONOMICS;
Macroeconomics is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these.
Macroeconomics provides the analysis for proper policy making so that we can develop and nurture the best economy possible.

Basic macroeconomics focuses on five main principles. So, what does macroeconomics study? The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

1. Economic Output:
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.
Aggregate demand and supply create the model to determine the total economic output. Governments typically release their GDP either annually or quarterly.

2. Economic Growth:
Economic growth is measured by comparing GDP over time. The formula for calculating GDP is GDP = private consumption + gross private investment + government investment + government spending + (exports – imports).

3. Unemployment:
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.

Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.

4. Inflation:
Inflation depicts an economic situation where there is a general rise in the prices of goods and services, continuously. It could be defined as ‘a continuing rise in prices as measured by an index such as the consumer price index (CPI) or by the implicit price deflator for Gross National Product (GNP)’.
There are three primary types of inflation: Demand-pull inflation. Cost-push inflation. Built-in inflation.

5. Investment:
In an economic outlook, an investment is the purchase of goods that are not consumed today but are used in the future to generate wealth. In finance, an investment is a financial asset bought with the idea that the asset will provide income further or will later be sold at a higher cost price for a profit.

MICROECONOMICS:
The three primary microeconomics concepts include demand supply, incentives, and costs and benefits. Additionally, production, opportunity cost, price, consumption, and scarcity are taken into consideration.

1 Demand/ Supply:
In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.

2. Opportunity cost:
Opportunity cost is an economics term that refers to the value of what you have to give up in order to choose something else. Opportunity cost is the potential forgone profit from a missed opportunity—the result of choosing one alternative and forgoing another.

3. Production:
Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output will be a good or service which has value and contributes to the utility of individuals.The area of economics that focuses on production is called production theory, and it is closely related to the consumption (or consumer) theory of economics.

4. Consumption:
Consumption, in economics, the use of goods and services by households. Consumption is distinct from consumption expenditure, which is the purchase of goods and services for use by households. Consumption differs from Consumption expenditure primarily because durable goods, such as automobiles, generate an expenditure mainly in the period when they are purchased, but they generate “consumption services” (for example, an automobile provides transportation services) until they are replaced or scrapped.

Name:ANI CHISOM PROMISE
Reg no:2020/242569
Department:Economics
Microeconomics and macroeconomics are closely related.Changes in the whole economy arise from the decisions of individual economic units the households and business firms.It is therefore,impossible to understand or carry out macroeconomic analysis without relating it to the relevant microeconomic decisions.For example, macroeconomic growth shift the production possibilities curve outwards but the growth may be best explained by changes in microeconomic factors such as technological change and changes in resources endowments.Thus even though the production possibilities frontier is derived from microeconomic principles,it can be used to discuss macroeconomic Issues.
Microeconomics implements the economic theory by widening its approach,to focus on issues of the economy as a whole unit rather than the individual units.microeconomics uses set of fundamental principles to make predictions about how individuals behave in certain situations involving economic or financial transaction.These principles include the law of supply and demand,opportunity costs and utility maximization ,then macroeconomics focuses on five main principles,the five principles are economic output ,economic growth,unemployment,inflation and deflation and investment,it deals with aggregate economic analysis and using the aggregate demand ,aggregate supply model for the determination of output,employment and prices.

Name: Igwebuike Kenechi Kester
Reg no: 2020/246575
Email: kenechi.igwebuike.246575@unn.edu.ng

Microeconomics, as the name implies deals with an economy studied on the small scale. It deals with individual components of the economy rather than the whole. As stated above it is majorly concerned with how supply and demand interact in individual markets. it studies the effects of what would happen if supply and or demand is influenced in individual markets. For example, Microeconomics tries to determine what would happen if demand exceeds supply or if supply exceeds demand in individual markets. For the case of when demand exceeds supply, it has determined that prices would rise due to scarcity and for the case where supply exceeds demand it has determined prices would drop due to there being an excess i.e there is more of a particular product than people are willing to buy.

Macroeconomics talks about aggregates of an economy where all those individual markets are brought together and studied as one. In this case, we talk about the economy as a whole rather than individual markets as with Microeconomics. Here we deal with aggregate variables i.e Aggregate demand and aggregate supply.. Aggregate demand refers to the total demand for final goods and services produced in an economy at a given time and aggregate supply refers to the total supply of goods and services produced in an economy at a given overall price at a given time. The aggregate demand curve is downward sloping which indicates that as price goes up the total demand in an economy falls due to consumers being very price sensitive. As for the aggregate supply curve, it is upward sloping which indicates that as price increases, total supply increases because suppliers are willing to supply more at an increased price so as to increase their profit margin.

Name: Ugwu Oluchi Jacintha
Matric no: 2020/ 250319( 1/3)
Department: Social science education
Unit: Education/ Economics
Email: Oluchiu71@gmail.com
ANSWER
The basic fundamental principles of macro economics is as follows:Macro economics focuses on five main principle
1 Economic Output
2 Economic Growth
3 Unemployment
4 Inflation and Deflation
5 Investment

Basic fundamental principles of Micro Economics is as follows:
1 Microeconomics studies the decisions of individuals and firms to allocate resources of production, Exchange,and consumptions
2 Microeconomics deals with prices and production in single markets and the interaction between different markets.

Microeconomics vs. Macroeconomics: An Overview
Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.
Microeconomics
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.

Microeconomics involves several key principles, including (but not limited to):

Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.

Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”

Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.
Microeconomic concepts such as supply and demand affect stocks prices in two ways: directly and indirectly.

The direct effect can be gauged by the impact of demand and supply disequilibrium on stock prices. When demand for a stock exceeds supply at a given point in time because there are more buyers than sellers, the stock will rise; conversely, when supply exceeds demand because there are more sellers than buyers, the stock will fall.
The indirect effect is based on supply and demand for the underlying company’s products and services. If the company’s products are flying off the shelves because of robust demand, it may be on a probable strong earnings trajectory that would likely translate into a higher price for its stock. But if demand is sluggish and there is excess inventory (or supply) of its products, the company’s earnings may disappoint and the stock may slump.

Name: Jonathan Tracy amarachi
Dept: philosophy
Reg No: 2020/243131

Before i go into the principles of microeconomics
and macroeconomics. The term microeconomics and macroeconomics should be clearly defined.
Microeconomics focuses on the action of individual agents within the economy like households, workers and businesses. It is also house individuals making decisions and interacting with one another in the market.
Microeconomics determine how households and individual spend their budgets, what combinations of goods and services will best fit their needs and want, given the budget, they have to spend, how do people decide whether to work, and if so, whether to work full time or part time. What determine the product and how many of each, will a firm produce and sell, what determine price change etc.
The principles of microeconomics are; pricing theory, income theory, consumer behavior theory, production theory and marginal utility theory etc.

Macroeconomics looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deflicits and levels of exports and import. Macroeconomics tries to explain the economic changes that affect many households, forms and markets at once.
Macroeconomics determine the level of economic activity in economic activity in a society, what determine how many jobs are available in an economy what determine a national standard of living, what causes the economy to spend up or slow down, what causes firm to hire more workers or to lay workers off,what causes the economic to grow over the long run.
Principles of macroeconomics include:
The effect of the business cycle on wider economy and what the causes and economy to grow over a long period of time. This is classified further into the following;
1. National income, this involves the income a nation make in a year. They are in different area like GDP, GNP, NNI. It is to point the financial health of the national.
2. Inflation, it is the study of how the cost of goods and services rises as time goes on .
3. Economic output, this is the study of goods and services which a national economy products. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefits this holds for a country due to the facts that more be in employment and greater tax, revenue will be raised.
4. International Trade, this area of macroeconomics looks at the trade that occurs between nation’s in terms of goods, services and raw materials.
Although microeconomics and macroeconomics have different principles, they work closes in making the economy healthy and productive not only for the individuals but for the nation as well.

Microeconomics focuses on the actions of individual agents within the economy, like households, workers, and businesses; Macroeconomics looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports. Microeconomics and macroeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy.

DEPT:SOCIAL SCIENCE EDUCATION.
UNIT: EDUCATION ECONOMICS.
NAME:IZUCHUKWU CHIDIMMA MARYJANE.
REG NO: 2020/242685.
EMAIL: faustian2sure@gmail.com.
DATE:9TH DECEMBER,2022.
TOPIC:FUNDAMENTAL PRINCIPLES OF MACRO AND MICRO ECONOMICS.

Economics is concerned with the well-being of all people, including those with jobs and those without jobs, as well as those with high incomes and those with low incomes. Economics acknowledges that production of useful goods and services can create problems of environmental pollution. It explores the question of how investing in education helps to develop workers’ skills. It probes questions like how to tell when big businesses or big labor unions are operating in a way that benefits society as a whole and when they are operating in a way that benefits their owners or members at the expense of others. It looks at how government spending, taxes, and regulations affect decisions about production and consumption.Economics is divided into two categories:
A)Macro economics.
B)Micro economics.

MACRO ECONOMICS
Macro is the Greek root meaning large.
Macroeconomics studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?” Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.
Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
Macro economics principles includes;
a) National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
b) Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost #1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
c) Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.
d)International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.Macroeconomics has two types of policies for pursuing these goals: monetary policy and fiscal policy.

MICRO ECONOMICS.
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.Microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.micro is the Greek root meaning small.
Micro economics principles include;
a) Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
b) Production Theory: This principle is the study of how goods and services are created or manufactured.
c) Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
d)Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income. The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.
Macroeconomics and microeconomics are not separate subjects, but rather complementary perspectives on the overall subject of the economy.

Name: Muokebe chiamakafaith
Reg no:2020/244660
Dept:Education Economics

Fundamental principles of macro and macroeconomics

Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.
Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.
The macroeconomic perspective looks at the economy as a whole, focusing on goals like growth in the standard of living, unemployment, and inflation. Macroeconomics has two types of policies for pursuing these goals: monetary policy and fiscal policy.
Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach.
Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine its course and nature.
Investors can use microeconomics in their investment decisions, while macroeconomics is an analytical tool mainly used to craft economic and fiscal policy.

The fundamental principles of Microeconomics and Macroeconomics

Microeconomics
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.

Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.

Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.

For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.

Microeconomics involves several key principles, including (but not limited to):

Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.

Production Theory: This principle is the study of how goods and services are created or manufactured.

Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.
The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”

Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.

Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.

John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena. Some economists dispute his theories, while many Keynesians disagree on how to interpret his work.
Microeconomic and Macroeconomic perspectives are useful, consider the problem of studying a biological ecosystem like a lake. One person who sets out to study the lake might focus on specific topics: certain kinds of algae or plant life; the characteristics of particular fish or snails; or the trees surrounding the lake. Another person might take an overall view and instead consider the entire ecosystem of the lake from top to bottom; what eats what, how the system stays in a rough balance, and what environmental stresses affect this balance. Both approaches are useful, and both examine the same lake, but the viewpoints are different. In a similar way, both microeconomics and macroeconomics study the same economy, but each has a different viewpoint.

A monetarist is an economist who advocate monetarism (also referred to as monetarist theory) monetarism refer to as fundamental principles of macro economic theory that focuses on the importance of the money supply. A monetarist adop the monetary policy of the macroeconomics policy tools. 8t is a tools implemented to adjust internet rate that in turn, control the money supply. When interest rates are increase people have more of an incentive to save than to spend, thereby reducing contracting the money supply… A monetarist support the doctrine that a nations economy system is controlled by the regulations of money supply lead to deflation and risk causing inflation.
Famous monetarist include Milton Friedman, chair of federal reserve in united state.

NAME: OGUANYA FAITH CHIDERA
REG NO: 2020/242638
DEPT: ECONOMICS

As an emerging economist, it is important to understand the fundamental principles of both microeconomics and macroeconomics.

Microeconomics is concerned with the behavior of individual economic agents, such as households and firms, and how they make decisions regarding the allocation of limited resources. Some key principles of microeconomics include supply and demand, opportunity cost, and marginal analysis.

Supply and demand is the fundamental principle that determines the price and quantity of a good or service in a market. The law of supply and demand states that, all other things being equal, an increase in demand for a good or service will lead to an increase in its price, while an increase in supply will lead to a decrease in its price.

Opportunity cost is the cost of an opportunity forgone, or the value of the next best alternative that must be given up in order to pursue a certain action. This principle is important because it helps individuals and firms make decisions about how to allocate their resources in the most efficient way.

Marginal analysis is a technique used to determine the optimal decision in a situation by considering the additional costs and benefits of each possible action. This principle is based on the idea that, in most cases, it is not optimal to make decisions based on the total costs and benefits of a situation, but rather to consider the incremental costs and benefits of each possible action.

Macroeconomics, on the other hand, is concerned with the performance of the economy as a whole, including issues such as inflation, unemployment, and economic growth. Some key principles of macroeconomics include the business cycle, aggregate demand and supply, and fiscal and monetary policy.

The business cycle is the pattern of economic growth and contraction that occurs over time. It is typically measured using indicators such as gross domestic product (GDP) and unemployment rate. Macroeconomists study the causes and effects of the business cycle and how it can be managed through the use of fiscal and monetary policy.

Aggregate demand and supply is the total demand for and supply of goods and services in an economy. The relationship between aggregate demand and supply determines the overall level of prices in the economy and the amount of output produced.

Fiscal policy refers to the use of government spending and taxation to influence the economy. Monetary policy, on the other hand, refers to the use of tools such as interest rates and the money supply to influence the economy. Macroeconomists study how these policies can be used to achieve goals such as low inflation and high employment.

In conclusion, microeconomics and macroeconomics are two fundamental branches of economics that deal with different aspects of the economy. Microeconomics focuses on the behavior of individual economic agents and how they make decisions, while macroeconomics focuses on the performance of the economy as a whole and how it can be managed through the use of fiscal and monetary policy.

FUNDAMENTAL PRINCIPLES OF MICROECONOMICS AND MACROECONOMICS.
Fundamental principles of microeconomics
1. Cost of production: According to this theory,the price of goods and services is determined by the cost of the resources used during production.
2. Demand, supply and equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
3. Labor economics: This principles looks at workers and employers, and tries to understand patterns of wages, employment and income.
4. Production theory: This principles is the study of how goods and services are created or manufactured.
Principles of macroeconomics
1. Economic output: These measures the quantity of goods and services produced in a given time period by a firm, industry or country whether consumed or used for further production.
2. Economic growth: This refers to the increase in the production of economics goods and services compared from one period of time to another.
3. Unemployment: These are people above a specified age not being in paid employment or self-employment but currently available for work during the reference period.
4. Investment: Investment consists of the addition to the nation’s capital stock of buildings, equipment, software and inventories during a year.
5. Inflation and deflation: These refers to a general increase and decrease in the prices of goods and services in an economy.

FUNDAMENTAL PRINCIPLES OF MICRO AND MACRO ECONOMICS.
(A) The Fundamental principles of microeconomics are as follows:
* Production theory: This involves the way goods and services are manufactured or made.
* Cost of production: Here, the price of goods and services is determined by the cost of the resources used during production.
* Labor Economics: Labor economics is based on workers and employers and tries to understand patterns of wages, employment and income.
* Demand, Supply and Equilibrium: Economic equilibrium is created when suppliers offer the same price demanded by consumers in a perfectly competitive market.

(B) The Fundamental Principles of macroeconomics are as follows:
* Economic Output: Economic output measures the value of all sales of goods and services. It sums up the final purchases and intermediate inputs, therefore resulting in the double counting of intermediate purchases.
* Economic Growth: This refers to the increase in the production of economic goods and services compared from one period of time to another.
* Inflation and deflation: Inflation occurs when the price of goods and services rise while deflation occurs when those prices decrease. The balance between these two economic conditions is delicate and an economy can quickly swing from one condition to the other.
* Investment: This theory refers to an asset or item accrued with the goal of generating income or recognition. It can also be said to be the purchase of goods that are not consumed today but are used in the future to generate wealth.
* Unemployment: This refers to the condition of one who is capable of working, actively seeking work but unable to find any work.

Mordi, Chidera Reginald
Regno.: 2020/242598
Economics major
Email: chidera.mordi.242598@unn.edu.ng
A discussion on the fundamental principles of microeconomics and macroeconomics.
Economics has two major views or standpoints on how to study the economic activities that occur in an economy. This two standpoints are microeconomics and macroeconomics.
Microeconomics is the study of how individuals and businesses make choices regarding the best use of limited resources. Its principles can be usefully applied to decision-making in everyday life—for example, when you rent an apartment. Most people, after all, have a limited amount of time and money. They cannot buy or do everything they want, so they make calculated microeconomic decisions on how to use their limited resources to maximize personal satisfaction.
Some of microeconomic principles include;
Maximizing utility:Maximizing utility means that individuals make decisions to maximize their satisfaction.
Opportunity cost:When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.
Diminishing marginal utility:Diminishing marginal utility, another economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get from it. When you eat a burger, for example, you may feel very satisfied, but if you eat a second burger, you may feel less satisfaction than you experienced with the first burger.
Supply and demand:Two other important economic principles are supply and demand as they appear in the market. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.
While Macroeconomics focuses on how the entire economy functions. It tries to find ways to maximize the standard of living and achieve economic growth. There are many changes and variables that affect the entire economy. These include, but aren’t limited to: unemployment, productivity, inflation, and other economic indicators. Macroeconomics studies the results from many different countries and how their policies compare. It analyzes the failures and successes of governments based on economic indicators and performance.
Some of the principles include ;
Economic Output:Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region.
Unemployment:Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people.
Inflation and deflation:Inflation occurs when the prices of goods and services rise, while deflation occurs when those prices decrease. The balance between these two economic conditions, opposite sides of the same coin, is delicate and an economy can quickly swing from one condition to the other.
Investment:By investment, economists mean the production of goods that will be used to produce other goods
In conclusion, macroeconomics and microeconomics are like Siamese twins.Both concepts are vital for a full hrasp of the concept economics as a whole.Both concepts complement each other.

NAME: IKPO NGOZIKA GLORIA
REG NO:2020/245311
EMAIL: gloriachioma47@gmail.com

Basic macroeconomics focuses on five main principles. The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.
1. Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:
a). Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
b). Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually or quarterly
Economic Growth
Economic growth is measured by comparing GDP over time.
2. Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.

principle of microeconomics
Microeconomics follows the general principles of economics. Some of these are discussed below:
1 – Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
2 – Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost
This is with the assumption that the choices are mutually exclusive
It is an opportunity cost when a decision-maker lets go of.
3 – Law of Diminishing Marginal Utility
The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.
4 – Giffen Goods
Giffen goods
are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve
is positively sloped.
5 – Veblen Goods
Veblen Goods
are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems.
6 – Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

Name: Magbo Chidimma Joy
Department : Education Economics
Registration Number: 2020/242674
Course Code: ECO 102
Course Title: Principle of Economic
Assignment:
Email : joychidimma961@gmail.com

Economics is divided into two categories:
1)Microeconomics and Macroeconomics.

Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.

1)Microeconomics
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.
Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.
Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.
For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.
Microeconomics involves several key principles, including (but not limited to):

a)Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
b)Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
c)Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.
The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.

2)Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”
Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.
Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena. Some economists dispute his theories, while many Keynesians disagree on how to interpret his work.

Individual investors may be better off focusing on microeconomics, but macroeconomics cannot be ignored altogether. Fundamental and value investors may disagree with technical investors about the proper role of economic analysis. While it is more likely that microeconomics will impact individual investments, macroeconomic factors can affect entire portfolios.

Warren Buffett famously stated thatA macroeconomic factor is an economic, environmental, or geopolitical event that broadly affects a regional or national economy. choose investments, Buffett said, “Charlie and I don’t pay attention to macro forecasts. We have worked together now for 54 years, and I can’t think of a time we made a decision on a stock, or on a company … where we’ve talked about macro.
1) Buffett also has referred to macroeconomic literature as “the funny papers.”
2)John Templeton, another famously successful value investor, shared a similar sentiment. “I never ask if the market is going to go up or down because I don’t know, and besides, it doesn’t matter,” Templeton told Forbes in 1978. “I search nation after nation for stocks, asking: ‘Where is the one that is lowest priced in relation to what I believe it’s worth?’”

Global Macro Strategy?
A global macro strategy is an investment and trading strategy that centers around large macroeconomic events at a national or global level. “Global Macro” involves research and analysis of numerous macroeconomic factors, including interest rates, currency levels, political developments, and country relations.

What Is the Basic Difference Between Microeconomics and Macroeconomics?
1)Microeconomics is the study of how individuals and companies make decisions to allocate scarce resources. Macroeconomics is the study of an economy as a whole.
2) Microeconomic factor are supply and demand, taxes and regulations, and macroeconomic factors are gross domestic product (GDP) growth, inflation, and interest rates.

How Do Core Concepts of Microeconomics Such as Supply and Demand Affect Stock Prices?
Microeconomic concepts such as supply and demand affect stocks prices in two ways: directly and indirectly.

The direct effect can be gauged by the impact of demand and supply disequilibrium on stock prices. When demand for a stock exceeds supply at a given point in time because there are more buyers than sellers, the stock will rise; conversely, when supply exceeds demand because there are more sellers than buyers, the stock will fall.
The indirect effect is based on supply and demand for the underlying company’s products and services. If the company’s products are flying off the shelves because of robust demand, it may be on a probable strong earnings trajectory that would likely translate into a higher price for its stock. But if demand is sluggish and there is excess inventory (or supply) of its products, the company’s earnings may disappoint and the stock may slump.

Microeconomic factors such as supply and demand, taxes and regulations, and macroeconomic factors such as gross domestic product (GDP) growth, inflation, and interest rates, have a significant influence on different sectors of the economy and hence on your investment portfolio.

microeconomics is concerned with how supply and demand interact in individual markets for goods and services. In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables

The assumptions of economists are made to better understand consumer and business behavior when making economic decisions. There are various economic theories to help explain how an economy functions and how to maximize growth, wealth, and employment.

However, the underlying themes of many theories center on preferences, meaning what businesses and consumers prefer to have or prefer to avoid. Also, the assumptions usually involve the resources available or not available to fulfill the needs and preferences. The scarcity or abundance of resources is important in determining the choices that participants make in an economy.

Find out why economists make assumptions and how those assumptions impact economic models.The assumptions of economists are made to better understand consumer and business behavior when making economic decisions.
Economists can’t isolate individual variables in the real world, so they make assumptions to create a model that they can control.
Some economists assume that people make rational decisions when purchasing or investing in the economy.
Conversely, behavioral economists assume that people are emotional and can get distracted, thus influencing their decisions.Why Economists Need Assumptions
In his 1953 essay titled “The Methodology of Positive Economics,” Milton Friedman explained why economists need to make assumptions to provide useful predictions. Friedman understood economics couldn’t use the scientific method as neatly as chemistry or physics, but he still saw the scientific method as the basis. Friedman stated economists would have to rely on “uncontrolled experience rather than on controlled experiment.The scientific method requires isolated variables and testing to prove causality. Economists can’t possibly isolate individual variables in the real world, so they make assumptions to create a model with some constancy. Of course, errors can occur, but economists in favor of the scientific method are fine with the errors provided they’re small enough or have limited impact.Understanding the Assumptions of Economists
Each economic theory comes with its own set of assumptions that are made to explain how and why an economy functions. Those who favor classical economics assume that the economy is self-regulating and that any needs in an economy will be met by participants.In other words, there’s no need for government intervention. People will allocate resources properly and efficiently. If there’s a need in an economy, a company will start up to fill that need creating balance. Classical economists assume that people and companies will stimulate the economy and create growth by spending and investment.

Neo-classical economists assume that people make rational decisions when purchasing or investing in the economy. Prices are determined by supply and demand while there are no outside forces impacting prices.

Consumers strive to maximize utility or their needs and wants. Maximizing utility is a key tenet of rational choice theory, which focuses on how people achieve their objectives by making rational decisions. The theory holds that people, given the information they have, will opt for choices that provide the greatest benefit and minimize any losses.

Neoclassical economists believe the propensity for consumer needs drives the economy and the business production that results to fill those needs. Any imbalances in an economy are believed to be corrected through competition, which restores equilibrium in the markets allocating resources properly.

Criticisms of Assumptions
Most critics argue that assumptions in any economic model are unrealistic and don’t hold up in the real world. In classical economics, there’s no need for government involvement. So, for example, there wouldn’t have been any money allocated to bank bailouts during the 2008 financial crisis and any stimulative measures in the Great Recession that followed.

Many economists would argue that the market wasn’t acting efficiently, and if the government hadn’t intervened, more banks and businesses would have failed, leading to higher unemployment.

The assumption in neoclassical economics that all participants behave rationally is criticized by some economists. Critics argue that there are myriad factors that impact a consumer and business that might make their choices or decisions irrational. Market corrections and bubbles, as well as income inequality, are all the result of choices made by participants that some economists would argue are irrational.

Behavioral Economics
In recent years, the examination of the psychology of economic choices and decisions has gained popularity. The study of behavioral economics accepts that irrational decisions are made sometimes and tries to explain why those choices are made and how they impact economic models.

Behavioral economists assume that people are emotional and can get distracted, thus influencing their decisions. For example, if someone wanted to lose weight, the person would study which healthy foods to eat and adjust their diet (rational decision); however, when at a restaurant, an individual sees the dessert menu, opts for the fudge cake, that is a distraction based on emotion.

Behavioral economists believe that even though people have the goal of making rational choices, outside forces and emotions can get in the way; making the choices irrational.What Is an Example of an Economic Model?
An economic model is a hypothetical situation containing multiple variables created by economists to help understand various aspects of an economy and human behavior. One of the most famous and classical examples of an economic model is that of supply and demand. The model argues that if the supply of a product increases then its price will decrease, and vice versa. It also states that if the demand for a product increases, then its price will increase, and vice versa.

What Are Economic Assumptions?
Economic assumptions are assumptions that economists make about individuals, markets, or businesses. These assumptions are used to help predict the decisions of players in an economy and how different players use scarce resources. Assumptions can include unlimited wants, self-interest in decision-making, and rational decision-making.

How Do Economists Make Assumptions When Designing Models?
Economists make a variety of assumptions when designing models. A basic starting point for some economic models can be assuming unlimited wants and unlimited resources. Such assumptions help to better understand the decisions of individuals, such as in the economic concept of utility. The primary reason that economists make assumptions is to control variables or to exclude variables that don’t help determine predictive power.

Are Economic Models Used for Day-to-Day Pricing Decisions?
Economic models can be used for day-to-day pricing decisions. The models can help understand the reasons why a company prices its products the way it does. These models can also determine how consumers will react to these pricing decisions (demand)The Bottom Line
Economics is a complex social science that is affected by a variety of factors. To better understand these factors, economists make assumptions in their economic models to control the model and understand a specific theory and outcome. Different branches of economics come with their own assumptions to explain how individuals and businesses use their resources.

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Name:Onoka Esther Chika
Reg No:2020/242905
Department:Combined Social Science (Economics and Psychology)
Faculty:Social Science
Course:Eco 102

Questions
Fundamental Principles Of Macro And Micro Economics

Answers
Fundamental Principles Of Microeconomics:

MICROECONOMICS: Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.
Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.
Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.
For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.
Microeconomics involves several key principles, including (but not limited to):
• Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
• Production Theory: This principle is the study of how goods and services are created or manufactured.
• Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
• Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.
The rules in microeconomics flow from a set of compatible laws and theorems, rather than beginning with empirical study.

MACROECONOMICS: Macroeconomics on the other hand, studies the behavior of a country and how its policies impact the economy as a whole.It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”

Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployments .

What are the Fundamental Principles of Macroeconomics?

Basic macroeconomics focuses on five main principles. The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

Economic Output

Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:

Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually or quarterly.

Economic Growth

Economic growth is measured by comparing GDP over time. This is calculated with the basic formula:
GDP2–GDP1/GDP1.

Unemployment

Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people.

Inflation and Deflation:
Inflation and deflation are economic factors that investors must take into consideration when planning and managing their portfolios. The two trends are opposite sides of the same coin: Inflation is defined as the rate at which prices for goods and services is rising; deflation is a measure of a general decline in prices for goods and services. Whichever trend is in motion, the steps investors can take to protect their holdings are clear—though the economy can rapidly move from one to the other, making the proper steps more difficult to discern.

Lastly,Investment:
Investment refers to strategies used in generating future income,it is defined as the commitment of current financial resources in order to achieve higher gains in the future. It deals with what is called uncertainty domains. Hence, the information that may help shape up a vision about the levels of certainty in the status of investment in the future is significant. From an economic perspective, investment and saving are different; saving is known as the total earnings that are not spent on consumption.the sole purpose of investment is to make gains .

Name: Chukwukere Victory Onyinyechi
Reg no:2020/243110
Department: Philosophy
Faculty: Social sciences

Economics looks at two realism and they include: macro and micro economics.
Macro economics is the big picture and it is concerned with how the overall economy works.
Little picture- micro economics is concerned with how supply and demand interact in individual market for goods and services.
The fundamental principles of macro and micro economy include:

MICRO ECONOMICS:

(1). Cost of production: Here, the prices of goods and services is determined by the cost of the resources used during production of the goods and services.

(2). Labour Economics:this principle looks at workers and employers and tries to understand patterns of wages, employment and income.

(3). Demand, supply and equilibrium: Prices are determined by the law of supply and demand (states that the higher the price, the higher the quantity supplied and the highest the price the lower the quantity demanded for). In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.

(4). Opportunity cost: A consumer who is also a decision maker has limited resources and unlimited options to use their resources. The cost a consumer suffer for not choosing the best alternative is called the opportunity cost. This is with the assumption that the choices are mutually exclusive.

(5). Income and elasticity: As income increases, the demand for superior goods also increases. Also when the income decreases, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the consuer’s purchasing power goes up.

MACRO ECONOMICS:

(1). Economics output: This is the primary indicator considered on macro economics. It is measured by the gross domestic product (GDP) of a country or region.

(2). Unemployment: unemployment I also a major macro economics variable. It is the number of people who are not employed but are seeking employment. It doesnt include this not looking for work, such as children, retired people, and disabled people.

(3). Economic growth: Economic growth refers to an increase in aggregate production in an economy. Macro economists try to understand the factors that either promote or retard economic growth to support economic policies that will support development, progress, and rising living standard.

In conclusion, economics is split between analysis of how the overall economy works and how single market functions. Physicists look at the big world of planets, stars, galaxies and gravity but they also study the minute world of atoms and the tiny particles that comprise this atoms.

Economics is split between analysis of how the overall economy works and how single markets function

Physicists look at the big world of planets, stars, galaxies, and gravity. But they also study the minute world of atoms and the tiny particles that comprise those atoms.

Economists also look at two realms. There is big-picture macroeconomics, which is concerned with how the overall economy works. It studies such things as employment, gross domestic product, and inflation—the stuff of news stories and government policy debates. Little-picture microeconomics is concerned with how supply and demand interact in individual markets for goods and services.

In macroeconomics, the subject is typically a nation—how all markets interact to generate big phenomena that economists call aggregate variables. In the realm of microeconomics, the object of analysis is a single market—for example, whether price rises in the automobile or oil industries are driven by supply or demand changes. The government is a major object of analysis in macroeconomics—for example, studying the role it plays in contributing to overall economic growth or fighting inflation. Macroeconomics often extends to the international sphere because domestic markets are linked to foreign markets through trade, investment, and capital flows. But microeconomics can have an international component as well. Single markets often are not confined to single countries; the global market for petroleum is an obvious example.

The macro/micro split is institutionalized in economics, from beginning courses in “principles of economics” through to postgraduate studies. Economists commonly consider themselves microeconomists or macroeconomists. The American Economic Association recently introduced several new academic journals. One is called Microeconomics. Another, appropriately, is titled Macroeconomics.

Why the divide?

It was not always this way. In fact, from the late 18th century until the Great Depression of the 1930s, economics was economics—the study of how human societies organize the production, distribution, and consumption of goods and services. The field began with the observations of the earliest economists, such as Adam Smith, the Scottish philosopher popularly credited with being the father of economics—although scholars were making economic observations long before Smith authored The Wealth of Nations in 1776. Smith’s notion of an invisible hand that guides someone seeking to maximize his or her own well-being to provide the best overall result for society as a whole is one of the most compelling notions in the social sciences. Smith and other early economic thinkers such as David Hume gave birth to the field at the onset of the Industrial Revolution.

Economic theory developed considerably between the appearance of Smith’s The Wealth of Nations and the Great Depression, but there was no separation into microeconomics and macroeconomics. Economists implicitly assumed that either markets were in equilibrium—such that prices would adjust to equalize supply and demand—or that in the event of a transient shock, such as a financial crisis or a famine, markets would quickly return to equilibrium. In other words, economists believed that the study of individual markets would adequately explain the behavior of what we now call aggregate variables, such as unemployment and output.

The severe and prolonged global collapse in economic activity that occurred during the Great Depression changed that. It was not that economists were unaware that aggregate variables could be unstable. They studied business cycles—as economies regularly changed from a condition of rising output and employment to reduced or falling growth and rising unemployment, frequently punctuated by severe changes or economic crises. Economists also studied money and its role in the economy. But the economics of the time could not explain the Great Depression. Economists operating within the classical paradigm of markets always being in equilibrium had no plausible explanation for the extreme “market failure” of the 1930s.

If Adam Smith is the father of economics, John Maynard Keynes is the founding father of macroeconomics. Although some of the notions of modern macroeconomics are rooted in the work of scholars such as Irving Fisher and Knut Wicksell in the late 19th and early 20th centuries, macroeconomics as a distinct discipline began with Keynes’s masterpiece, The General Theory of Employment, Interest and Money, in 1936. Its main concern is the instability of aggregate variables. Whereas early economics concentrated on equilibrium in individual markets, Keynes introduced the simultaneous consideration of equilibrium in three interrelated sets of markets—for goods, labor, and finance. He also introduced “disequilibrium economics,” which is the explicit study of departures from general equilibrium. His approach was taken up by other leading economists and developed rapidly into what is now known as macroeconomics.

Coexistence and complementarity

Microeconomics is based on models of consumers or firms (which economists call agents) that make decisions about what to buy, sell, or produce—with the assumption that those decisions result in perfect market clearing (demand equals supply) and other ideal conditions. Macroeconomics, on the other hand, began from observed divergences from what would have been anticipated results under the classical tradition.

Today the two fields coexist and complement each other.

Microeconomics, in its examination of the behavior of individual consumers and firms, is divided into consumer demand theory, production theory (also called the theory of the firm), and related topics such as the nature of market competition, economic welfare, the role of imperfect information in economic outcomes, and at the most abstract, general equilibrium, which deals simultaneously with many markets. Much economic analysis is microeconomic in nature. It concerns such issues as the effects of minimum wages, taxes, price supports, or monopoly on individual markets and is filled with concepts that are recognizable in the real world. It has applications in trade, industrial organization and market structure, labor economics, public finance, and welfare economics. Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies.

Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level. The field is conventionally divided into the study of national economic growth in the long run, the analysis of short-run departures from equilibrium, and the formulation of policies to stabilize the national economy—that is, to minimize fluctuations in growth and prices. Those policies can include spending and taxing actions by the government or monetary policy actions by the central bank.

Bridging the micro/macro divide

Like physical scientists, economists develop theory to organize and simplify knowledge about a field and to develop a conceptual framework for adding new knowledge. Science begins with the accretion of informal insights, particularly with observed regular relationships between variables that are so stable they can be codified into “laws.” Theory is developed by pinning down those invariant relationships through both experimentation and formal logical deductions—called models.

Since the Keynesian revolution, the economics profession has had essentially two theoretical systems, one to explain the small picture, the other to explain the big picture (micro and macro are the Greek words, respectively, for “small” and “big”). Following the approach of physics, for the past quarter century or so, a number of economists have made sustained efforts to merge microeconomics and macroeconomics. They have tried to develop microeconomic foundations for macroeconomic models on the grounds that valid economic analysis must begin with the behavior of the elements of microeconomic analysis: individual households and firms that seek to optimize their conditions.

There have also been attempts to use very fast computers to simulate the behavior of economic aggregates by summing the behavior of large numbers of households and firms. It is too early to say anything about the likely outcome of this effort. But within the field of macroeconomics there is continuing progress in improving models, whose deficiencies were exposed by the instabilities that occurred in world markets during the global financial crisis that began in 2008.

How they differ

Contemporary microeconomic theory evolved steadily without fanfare from the earliest theories of how prices are determined. Macroeconomics, on the other hand, is rooted in empirical observations that existing theory could not explain. How to interpret those anomalies has always been controversial. There are no competing schools of thought in microeconomics—which is unified and has a common core among all economists. The same cannot be said of macroeconomics—where there are, and have been, competing schools of thought about how to explain the behavior of economic aggregates. Those schools go by such names as New Keynesian or New Classical. But these divisions have been narrowing over the past few decades (Blanchard, Dell’Ariccia, and Mauro, 2010).

Microeconomics and macroeconomics are not the only distinct subfields in economics. Econometrics, which seeks to apply statistical and mathematical methods to economic analysis, is widely considered the third core area of economics. Without the major advances in econometrics made over the past century or so, much of the sophisticated analysis achieved in microeconomics and macroeconomics would not have been possible.

NAME: EKWEGBARA EVERESTAR CHIBUGO
REG NO: 2020/243840
DEPARTMENT: EDUCATION ECONOMICS
EMAIL: chibugo.ekwegbara.243840@unn.edu.ng

MICROECONOMICS
1. Microeconomics studies the behavior of consumers and firms and correlates it with demand and supply. The neo-classical approach states that consumers and producers derive optimum economic benefit by making rational decisions. As a result, this analysis helps businesses, individuals, and the government prepare for future possibilities. Companies use the study to ensure resource utilization, competitive pricing, optimized production, and an uninterrupted supply of goods. Based on this theory, governments change taxes, subsidies, grants, and advances.
2. Microeconomics primarily comprises the pricing theory, income theory, consumer behavior theory, production theory, and marginal utility theory. This analysis predicts a future possibility based on the buying decisions of businesses, individuals, and governments. It is entirely contradictory to macroeconomics, which studies the change in the gross domestic product resulting from the shift in aggregate demand and supply of goods. In microeconomics, the economists focus only on a single market or segment. Also, microeconomics believes that the markets attain equilibrium when the supply of goods controls the demand.
3. Microeconomics does have its drawbacks. It is limited to a specific industry or market. It ignores crucial economic factors like aggregate demand, aggregate supply, and national domestic product (NDP). Further, it falsely assumes that the economy operates at a full-employment.
4. Microeconomics involves several key principles, including (but not limited to):
Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.

MACROECONOMICS
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”
1. Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.
2. Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
3. Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.

1.
Microeconomics
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation.
Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.
Microeconomics involves several key principles, including (but not limited to):
Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Production Theory: This principle is the study of how goods and services are created or manufactured.
Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.

2.
Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies affect the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?” in an economy.
Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate.
Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena. Some economists dispute his theories, while many Keynesians disagree on how to interpret his work

FUNDAMENTAL PRINCIPLES OF MACROECONOMICS:
There are five fundamental principles of macroeconomics, viz:
1. ECONOMIC OUTPUT: Macroeconomics studies the national output, or income, of a country. National economic output is the total value of all goods and services produced in an economy during a specific period. Economists measure national output by calculating the Gross Domestic Product GDP which is the market value of the final goods and services that an economy produces during a specific period of time. Economists use the term Real GDP, which is GDP valued at a constant price level, to compare current output with past output. This comparison will tell you if the economy is growing, is stagnant, or is contracting.

2. ECONOMIC GROWTH: Economic growth is measured by comparing the GDP over time.

3. UNEMPLOYMENT: Unemployment is the number of people that are willing and ready to work but are not employed. We have;
a. Cyclical unemployment which relates to changes in business cycles.
b. Frictional Unemployment relates to when people are actively sesrching for a job.
c. Structural unemployment relates to job elimination because of economic structural changes.

4. INFLATION: Inflation relates to a general rise in prices measured against a standard level of purchasing power. Previously, the term was used to refer to an increase in the money supply, which is now referred to as expansionary monetary policy or monetary Inflation.

5. DEFLATION: Deflation is when consumer and assets prices decreases over time and the purchasing power increases. A reduction in money supply or credit availability is the reason for delation in most cases.

6. INVESTMENT: Investment consists of the additions to the nation’s capital stock of buildings, equipment, software and inventories during a year.

FUNDAMENTAL PRINCIPLES OF MICROECONOMICS:
They include;
1. DEMAND, SUPPLY AND EQUILIBRIUM: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price per demanded by consumers. This creates economic equilibrium.

2. PRODUCTION THEORY: This principle is the study of how goods and services are created or manufactured.

3. COSTS OF PRODUCTION: According to this theory, the price of goods and services is determined by the cost of the resources used during production.

4. LABOUR ECONOMICS: This principle looks at workers and employers, and tries to understand patterns of wages, employment and income.

The Fundamental Principles of Micro and Macro Economics as an Emerging Econimist

Microeconomics deals with the functioning of individual industries and the behavior of individ-ual economic decision-making units: firms and households. Firms’ choices about what to pro-duce and how much to charge and households’choices about what and how much to buy help to explain why the economy produces the goods and services it does.
Another big question addressed by microeconomics is who gets the goods and services that are produced. Wealthy households get more than poor households, and the forces that determine the Diverse Fields of Economics Individual economists focus their research and study in many diverse areas. Many of these specialized fields are reflected in the advanced courses offered at most colleges and universities. Some are concerned with economic history or the history of economic thought. Others focus on inter-national economics or growth in less developed countries. Still others study the economics of cities (urban economics) or the relationship between economics and law.

Macroeconomics looks at the economy as a whole. Instead of trying to understand what determines the output of a single firm or industry or what the consumption patterns are of a single household or group of households, macroeconomics examines the factors that determine national output, or national product.

👉Microeconomics is concerned with household income; macroeconomics deals with national income.
👉Whereas microeconomics focuses on individual product prices and relative prices, macro-economics looks at the overall price level and how quickly (or slowly) it is rising (or falling).
👉Microeconomics questions how many people will be hired (or fired) this year in a particular industry or in a certain geographic area and focuses on the factors that determine how much labor a firm or an industry will hire.
👉 Macroeconomics deals with aggregate employment and unemployment: how many jobs exist in the economy as a whole and how many people who are willing to work are not able to find work.

Microeconomics vs. Macroeconomics: An Overview
Economics is divided into two categories: microeconomics and macroeconomics.
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields. Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources. Having said that, microeconomics does not try to answer or explain what forces should take place in a market. Rather, it tries to explain what happens when there are changes in certain conditions.For example, microeconomics examines how a company could maximize its production and capacity so that it could lower prices and better compete. A lot of microeconomic information can be gleaned from company financial statements.
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?” Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate. Macroeconomics focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
Microeconomics is the study of how individuals and companies make decisions to allocate scarce resources. Macroeconomics is the study of an economy as a whole.

Name: UGWUANYI AMARACHI PERPETUAL
Reg No: 2020/245318
Email Address: ugwuanyiamaraa5@gmail.com

Economics is divided into two categories: Microeconomics and Macroeconomics. Microeconomics is the study of individuals and business decisions, while Macroeconomics looks at the decisions of countries and governments. Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.

A. Microeconomics
Microeconomics is the study of decisions made by people and businesses regarding the allocation of resources, and prices at which they trade goods and services. It considers taxes, regulations, and government legislation. Microeconomics focuses on supply and demand and other forces that determine price levels in the economy. It takes a bottom-up approach to analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.
Microeconomics involves several key principles, including:
1. Demand, Supply and Equilibrium: Prices are determined by the law of supply and demand. In a perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
2. Production Theory: This principle is the study of how goods and services are created or manufactured.
3. Costs of Production: According to this theory, the price of goods or services is determined by the cost of the resources used during production.
4. Labor Economics: This principle looks at workers and employers, and tries to understand patterns of wages, employment, and income.

B. Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies, rather than individuals or specific companies, which is why it’s a top-down approach. It tries to answer questions such as “What should the rate of inflation be?” or “What stimulates economic growth?”
Macroeconomics analyzes how an increase or decrease in net exports impacts a nation’s capital account, or how gross domestic product (GDP) is impacted by the unemployment rate. It focuses on aggregates and econometric correlations, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors who buy interest-rate-sensitive securities should keep a close eye on monetary and fiscal policy.
John Maynard Keynes is often credited as the founder of macroeconomics, as he initiated the use of monetary aggregates to study broad phenomena. Some economists dispute his theories, while many Keynesians disagree on how to interpret his work.

NAME: OBODO EJIKE JOEL
REG NUMBER: 2020/242620
DEPARTMENT: ECONOMICS
ECO 102
EMAIL: obodoejike@gmail.com
In view of the above assertion, you are required to clearly discuss the fundamental principles of Macro and Micro Economics as an Emerging Economist.

ANSWER
Microeconomics uses a set of fundamental principles to make predictions about how individuals behave in certain situations involving economic or financial transactions.
These principles include the law of supply and demand, opportunity costs, and utility maximization..

1. Supply and demand— Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for that good or service. The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices.

2. Opportunity cost—When an individual makes a decision, they also calculate the cost of forgoing the next best alternative. If, for instance, you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost.

3. Maximizing utility— Maximizing utility means that individuals make decisions to maximize their satisfaction.

The fundamental principle of macro Economics are;

1. National Income – The area of macroeconomics analyses the wealth a nation generates. There are different measures for this such as Gross National Product, Gross Domestic Product, and Net National Income. The underlying purpose of all of these is to paint a picture of the financial health of a nation. The basic approach to this undertaking is looking at the value of goods and services produced by a nation over the course of a year.
2. Inflation – Inflation is the study of how the cost of goods and services rises as time goes on. For example, if a car cost $1000 more in a given year than it did ten years previously, that would be a case of inflation. Inflation is a complex area of economics but the consensus among leading modern economists is that it’s desirable for inflation to be kept at a low or steady rate as near to zero as possible. This helps negate the negative consequences of economic recession.
3. Economic Output – This is the study of the goods and services which a national economy produces. A high output is desirable as the more money that is spent on a nation’s goods and services, the more benefit this holds for a country due to the fact that more people will be in employment and greater tax revenue will be raised.

4. International Trade – This area of macroeconomics looks at the trade that occurs between nations in terms of goods, services, and raw materials. International trade often forms a large part of a nation’s income as the world is obviously a far larger market place than a single nation. International trade is vital to the world economy as often certain raw materials or goods are only or best produced in a certain country or region. For example, colder nations do not have the climate needed to produce bananas, so for that country to have banana availability, international trade is required.



Department: Economics
Name: okparaaluu dominion chukwumaife
Course Code:Eco 102
Matriculation No:2020/245657
Fundamental principles of macro and micro Economics:
What are the Principles of Macroeconomics?
Basic macroeconomics focuses on five main principles. So, what does macroeconomics study? The five principles are: economic output, economic growth, unemployment, inflation and deflation, and investment.

Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:

Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.
Governments typically release their GDP either annually.

Aggregate demand and supply create the model to determine the total economic output.

Economic Growth
Economic growth is measured by comparing GDP over time. This is calculated with the basic formula:
G
D
P
2
−
G
D
P
1
G
D
P
1
GDP2−GDP1GDP1

It is important that the earlier GDP is the
G
D
P
1
GDP1. This will show if the growth is positive or negative.

Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.

Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.

Actual unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.

The formula for unemployment rate is the number of people who aren’t employed divided by the total number of eligible workers. The formula for the labor participation rate is a bit different because it only considers the civilian workforce. The labor participation rate is found by dividing the total civilian population available for work divided by the number of those people who are working or seeking work. Both the unemployment rate and the labor participation rate can be used to measure unemployment.
Then principles of micro Economics
Microeconomics Definition
Microeconomics is a ‘bottom-up’ approach where patterns from everyday life are pieced together to correlate demand and supply. The study examines how the behaviors of individuals, households, and firms have an impact on the market.
Microeconomics is entirely contradictory to macroeconomics. It is a narrower concept that focuses only on a single market or segment. This study only interprets the tiny components of the economy. The study states that the market attains equilibrium when the supply of goods controls the demand
Understanding Microeconomics
Microeconomics Principles
#1 – Demand and Supply
#2 – Opportunity Cost
#3 – Law of Diminishing Marginal Utility
#4 – Giffen Goods
#5 – Veblen Goods
#6 – Income and Elasticity
#7 – Substitution and Elasticity
Microeconomics is an economic stream that correlates the behaviors of people, companies, and households with the changes in demand and supply. Additionally, it also studies production and resource distribution within a particular segment, sector, or market.
According to the neoclassical approach of microeconomics, the producers and consumers ensure maximum economic welfare through rational decision-making.
The various concepts studied under the macroeconomics discipline include production theory, consumer behavior theory, pricing theory, marginal utility theory, and income theory.
Unlike macroeconomics, it is a study of human behavior and overlooks aggregate factors like GFP, employment, inflation, and recession.
Understanding Microeconomics
Microeconomics studies the behavior of consumers and firms and correlates it with demand and supply. The neo-classical approach states that consumers and producers derive optimum economic benefit by making rational decisions. As a result, this analysis helps businesses, individuals, and the government prepare for future possibilities. Companies use the study to ensure resource utilization, competitive pricing, optimized production, and an uninterrupted supply of goods. Based on this theory, governments change taxes, subsidies
, grants, and advances.

Microeconomics primarily comprises the pricing theory, income theory, consumer behavior theory, production theory, and marginal utility theory
. This analysis predicts a future possibility based on the buying decisions of businesses, individuals, and governments. It is entirely contradictory to macroeconomics
, which studies the change in the gross domestic product
resulting from the shift in aggregate demand and supply of goods. In microeconomics, the economists focus only on a single market or segment. Also, microeconomics believes that the markets attain equilibrium when the supply of goods controls the demand. In 1936, economists noticed a macroeconomic dis-equilibrium as there was a sustained depression, and this stream was separated from the former.

 Microeconomics does have its drawbacks. It is limited to a specific industry or market. It ignores crucial economic factors
like aggregate demand
, aggregate supply
, and national domestic product (NDP). Further, it falsely assumes that the economy operates at a full-employment.

Microeconomics Principles
Microeconomics follows the general principles of economics. Some of these are discussed below:

#1 – Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.
Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.
Finally, when both supply and demand are optimal, a state of equilibrium is achieved. The correlation between demand and supply and the state of equilibrium assumes that all other factors except price and demand remain constant.

#2 – Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost
. This is with the assumption that the choices are mutually exclusively.
It is an opportunity which a decision-maker lets go of. Say Sandra plans to buy a car and selects an SUV over a hatchback, then Sandra bears the opportunity cost of not choosing a hatchback.

#3 – Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer. For instance, an individual buys ice cream, consumes it, and then buys another one. Finally, after having three ice-creams, he doesn’t want them anymore and stops purchasing them.

#4 – Giffen Goods
Giffen goods
are the necessary items whose price rise doesn’t affect the demand. What makes Giffen goods unique is the price and demand equation. These are probably rational decisions, where the buyers are willing to pay a higher price despite the price hype. These types of exceptional goods are called ‘Giffen goods,’ where the demand curve
is positively sloped.
For instance, the price rise of petrol doesn’t reduce its demand. In order to be considered Giffen Goods, products must fulfill some of the following criteria:
A lack of substitute products
.The substitute should be inferior.
Amount spent on the product should be a major portion of the customer’s budget.
#5 – Veblen Goods
Veblen Goods
are similar to Giffen goods. These are the goods that are considered a symbol of status, esteem, or luxury. These are goods for which consumers do not mind paying a higher price. Typical examples include Rolls Royce, jewelry, and gems. The higher the prices higher the intensity to purchase these goods. Customers do this to exhibit their status.

#6 – Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

#7 – Substitution and Elasticity
Substitution effect: when the prices are higher than one can afford, people may prefer a cheaper substitute. This behavior of change in demand due to price is called the price elasticity of demand.

2020/247251

Microeconomic analysis offers insights into such disparate efforts as making business decisions or formulating public policies. Macroeconomics is more abstruse. It describes relationships among aggregates so big as to be hard to apprehend—such as national income, savings, and the overall price level.

Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources.
Microeconomics follows the general principles of economics. Some of these are discussed below:

(1).Demand and Supply
When demand exceeds supply over a period, suppliers either increase the supply or increase the prices. As prices go up, demand would ideally reduce since the number of people who can afford goes down. This way, suppliers buy time to get back in action coping with the demand.

Conversely, when supply surpasses demand, suppliers would either have to cut down on their supply or decrease the prices of the products being sold. Remember, at this point, manufacturers have a surplus of stock. So, when prices go down, demand would pick up and equal the supply.

(2).Opportunity Cost
A consumer who is also a decision-maker has limited resources (money) and unlimited options (opportunities) to use their resources. The cost a consumer suffers by not choosing the best alternative is the opportunity cost
. This is with the assumption that the choices are mutually exclusive.
Law of Diminishing Marginal Utility
This microeconomics concept is widely used for maximizing consumers’ utility. The law of diminishing marginal utility plays a crucial role in consumers’ decisions when purchasing. This law emphasizes that the demand for a particular product decreases with each consecutive unit consumed by a customer.

.(3).Income and Elasticity
As income increases, the demand for superior goods also increases. Also, when the income falls, the demand also slopes down. Alternatively, as the price drops, consumers can buy more goods. In both cases, the customer’s purchasing power goes up. On the contrary, Giffen and Veblen’s goods are examples of inelastic price demand.

Macroeconomics definition is the branch of economics studying the overall economy on a large scale. Macroeconomics means studying inflation, price levels, economic growth, national income, gross domestic product (GDP), and unemployment numbers. Principles of Macroeconomics: these are discussed below:

(1).Economic Output
Economic output is the primary indicator considered in macroeconomics. It is measured by the gross domestic product (GDP) of a country or region. GDP is calculated in one of two ways:

Add up all of the money spent by businesses, consumers, and the government. Adjust to remove the effects of inflation.
Add up the money received by all participants in the economy. Adjust to remove the effects of inflation.

(2)Economic Growth
Economic growth is measured by comparing GDP over time. This is calculated with the basic formula:
G
D
P
2
−
G
D
P
1
G
D
P
1

It is important that the earlier GDP is the
G
D
P
1
. This will show if the growth is positive or negative.

(3).Unemployment
Unemployment is also a major macroeconomic variable. Unemployment is the number of people who are not employed, but are seeking employment. It doesn’t include those not looking for work, such as children, retired people, and disabled people. Unemployment can’t be eliminated completely, but it can be sorted into different types.
Cyclical unemployment relates to changes in business cycles.
Frictional unemployment relates to when people are actively searching for a job.
Structural unemployment relates to job elimination because of economic structural changes.
These can be combined to provide different ways of viewing unemployment overall. Natural unemployment is a combination of frictional and structural unemployment. This is based on basic events like changing jobs or industries being in less demand. Natural unemployment is used to understand long-term trends.unemployment is found by adding the natural unemployment and the cyclical unemployment. This takes into consideration recessions and other business cycle changes. Actual unemployment is used to understand short term economic conditions.

UMEZEH SOMTOCHUKWU LUCY
2020/242622
ECO 102

Microeconomics is the study of individual economic units of an economy eg the household and firms. Marshall was the one that developed and perfected microeconomics as a method of economic analysis. Microeconomics deals with individual income, individual price and individual output. It’s Central problem is price determination and allocation of resources. It’s main tools are demand and supply of a particular factor.

Macroeconomics studies the behavior of the whole economy rather than individual economic markets. It studies the behavior of the aggregate economy. It deals with aggregate economic factors like national income, general price level. It’s Central problem is level of unemployment and income. It is useful in the formulation of economic policies for the country. It is very important for the evaluation of the overall performance of the economy in terms of national income.