Overview of Economics A study of economics usually begins by dividing the subject into microeconomics and macroeconomics. The former focuses on the exchanges between consumers and firms in markets for goods and services. In contrast, the latter focuses on exchanges that occur across all markets within a country, taking into account the interrelated actions of consumers, businesses, government agencies, financial intermediaries, and global trading partners as they exchange resources, goods, and services as well as facilitate currency and quantity flows. Furthermore, microeconomics concerns itself narrowly with the profit maximization goal, and macroeconomics addresses what should be done to achieve a greater, broader set of goals.
Opportunity cost and the Production Possibilities Curve Video transcript As we begin our journey into the world of economics, I thought I would begin with a quote from one of the most famous economists Macroeconomics introduction all time, the Scottish philosopher Adam Smith.
And he really is kind of the first real economist in the way that we view it now. And this is from his The Wealth of Nations, published incoincidentally, the same year as the American Declaration of Independence, and it's one of his most-famous excerpts.
He generally indeed, he being an economic actor, neither intends to promote the public interest, nor knows how much he is promoting it. By directing that industry, so that the industry in control of that individual actor in such a manner, as its produce may be of the greatest value, he intends only his own gain.
And he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. And this term "the invisible hand" is famous. Led by an invisible hand to promote an end which was no part of his intention.
He is saying, look, when individual actors just act in their own self-interest, that often in aggregate leads to things that each of those individual actors did not intend.
So, it was not necessarily a bad thing. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. So, this is really a pretty strong statement. It's really at the core of capitalism.
And that's why I point out that it was published in the same year as the American Declaration of Independence, because obviously America, the Founding Fathers, they wrote the Declaration of Independence, the Constitution, that really talks about what it means to be a democratic country, what are the rights of its citizens.
But the United States, with its overall experience of an American, is at least as influenced by the work of Adam Smith, by this kind of foundational ideas of capitalism. And they just both happened to happen around the same time. But this idea is not always that intuitive.
Individual actors, by essentially pursuing their own self-interested ends might be doing more for society than than if any of them actually tried to promote the overall well-being of society.
And I don't think that Adam Smith would say that it's always good for someone to act self-interested, or that it's never good for people to actually think about the implications of what they are doing in an aggregate sense, but he is saying that frequently.
Could lead to more innovation. Could lead to better investment. Could lead to more productivity. Could lead to more wealth, more, a larger pie for everyone. And now Economics is frequently.
Micro is that people, individual actors are acting out of their own self-interest. And the macro is that it might be good for the economy, or the nation as a whole.
And so, now, modern economists tend to divide themselves into these two schools, or into these two subjects: And you have macro-economics, which is the study of the economy in aggregate. And you get it from the words. Micro -- the prefix refers to very small things. Macro refers to the larger, to the bigger picture.
And so, micro-economics is essentially how actors. And you hear the words scarce resources a lot when people talk about economics.
And a scarce resource is one you don't have an infinite amount of. For example, love might not be a scarce resource. You might have an infinite amount of love.
But a resource that would be scarce is something like food, or water, or money, or time, or labor. These are all scarce resources. And so microeconomics is how do people decide where to put those scarce resource, how do they decide where to deploy them.Macroeconomics (from the Greek prefix makro-meaning "large" and economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.
This includes regional, national, and global economies. AmazonGlobal Ship Orders Internationally Explore Amazon Devices · Deals of the Day · Read Ratings & Reviews · Fast ShippingCategories: Books, Movies, Electronics, Clothing, Toys and more. In macroeconomics we look at both the long run and short run changes in the economy.
Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services.
In contrast to macroeconomics, microeconomics is the branch of economics that studies the behavior of individuals and firms in making decisions and the interactions among these individuals and firms in narrowly-defined markets. Course Introduction. Economics is traditionally divided into two parts: microeconomics and macroeconomics.
The main purpose of this course is to introduce you to the principles of macroeconomics. Macroeconomics is the study of how a country's economy works while trying to discern among good, better, and best choices for improving and/or.
Alfred Marshall, author of "The Principles Of Economics" () defined economics as a social science that examines people's behavior according to their individual self-interests.