Microeconomics is normally the study of individualsand business decisions, macroeconomics looks at high up nation and government decisions .
Macro economics and micro economics, and the wide spectrum of of the number of underlying concepts, has been the subject of a great deal of writings. The field of study is quite larget; and here is a short summary of what both of them cover:
Microeconomics is the study of decisions that companies of all kinds, and humans make, regarding the distribution of resources and the prices of different types of goods and services. …show more content…
Micro economics uses quite a few principles to make us understand how individuals and business make their decisions. One of the most basic principles of microeconomics is that people make decisions to increase their satisfaction. In micro economics, this is known as ‘maximizing utility’
One more economic principle that comes into play, as consumers make decisions is the opportunity cost. When a person decides something , he also calculates the complete cost of ignoring the next best option. For example, if I use my frequent flier point to make a trip to Nepal, I will not be able to redeem the points for money. This missed money is called an opportunity cost.
The diminishing marginal utility, which is another economic input, accurately describes the general experience of consumers, that the more we consume some thing, the lower the level of satisfaction we get. For example, if we eat one pizza, we may feel satisfied. But if we consumer a second pizza, we might feel a less fulfilment of satisfaction, as compared to the first