Macroeconomics And Micro Economic Analysis

Introduction

A lot of people think, that study of economics is only about the profit, but it is not only about the money, it is mostly related with the demand, supply and economic theories which support individuals to increase their profit. The word of “economics” is clearly identified by one of the famous economists Paul A. Samuelson: “Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people”. This assignment can clarify the distinctions and interconnections between Micro and Macroeconomics, and their relationship with the economic policies. Moreover, there are some definitions about the MES and some strategies to help firms to justify selling during long run period.

Interrelation between Macro and Microeconomics.

Aforementioned sharp distinctions help to clarify the essential difference between microeconomics and macroeconomics. Although these two branches of economics seem to be competitive, in fact, they are complementary. They are two interdependent rather than being independent. These two branches are mutually supportive. Most economic problems have both economics system and cannot be attained without proper integration of them. The modern theory of economics integrated the analysis of the behavior of individuals firm and the behavior of the economics as a whole.

1.3. Interdependence with the economic policies

In consideration of the aforecited fact, I can add that Micro and Macroeconomic theories are closely relates not only with each other, but also with the economic policy. Economic stability and conformity with the global competitive markets cannot be possible without coordination both of Micro and Macroeconomics. Micro-economics needs the help of Macroeconomics. For example, the sale of a firm not only depends own it price but also the total purchasing power of the commodity. The profit value of a firm depend on aggregate demand, national income and general price level. Similarly, the help of Micro-economics is inevitable for Macroeconomics. For example, nation output and income are the sum of income of million individuals and numerous firms respectably. Hence, the theory of the study of individual units and aggregate are both equally important. If we analysis Macroeconomics variable and its relationship, we must also allow for changes in Microeconomic variable, that can affect the Macroeconomic variables. For example, if the labor is immobile, total employment or total output may be less than they would be with