Economics Vs Microeconomics

Economics is the theories of social science that analyse the production, distribution and consumption of goods and service. Economics studies how individual and government allocate resource to satisfy the market demand. Economics can divide into two which is microeconomics and macroeconomics. According to Jeffrey Glen (2013), microeconomics is a study about the insinuation of individual human action, especially about how the decisions made affect the distribution and implementation of scare resources. Microeconomics show the concept of supply and demand, how a business establish prices, how individuals make efficient decisions and how individuals cooperate with one another. Microeconomics is not an explanation for what happen in a

The market can be rebalanced through adjustments in demand and supply in response to price signals. Alternately, producers can cooperate and out production to clear excess supplies. Both these adjustment mechanisms have their own lags and are associated with a high degree of uncertainly, history has shown that adjustment in the oil market is far from smooth and can result in some sharp price moments. The demand and supply concept help us to indicate the actual value of goods and the actual purchased and produced are determined in free and competition market (Sloman, Wride and Garratt, 2012). The equilibrium price will remain unchanged when the demand and supply curves remain unchanged. (Sloman, Wride and Garratt, 2012). Surplus and shortage occurred if price of quantity of demanded change. According to Mc Conell, Brue and Flyan (2012), the meaning of shortage is the quantity of demanded good surpass the quantity supplied below the equilibrium price. The prices of demanded good will raise when shortage exists. When shortage happen, consumes have to pay a higher price for a limited amount. Law of demand state that the price of a good increases while the quantity demanded of the good falls. Law of supply states that the price of a good increases, However, surplus is difference between the quantity demanded and the quantity supplied in a market

In the case, the demand of oil in the market has to equal the supply of oil in the market. According to OPEC’s secretary general in his interview, Organisation of the petroleum Exporting Countries (OPEC) saying that oil markets had rebalanced following years of oversupply. The global destocking process continues. In recent months, a massive is drainage of oil tanks across all regions even though positive developments showing a quickening of the process. The supply should cuts as well as strong demand, so the price can support heading towards the end of the