2. Micro Economics
Study of individual units like households and
firms.
Deals with the functioning at micro level.
3. Macro Economics
Concerned with the whole economy.
Analysis the relationship and behaviour of
economic aggregates like national income,
total consumptions, savings, investments,
employment, price level etc…
4. Internal Issues
Internal issues of the firm are addressed by
micro economics.
(what to produce, how to produce, for whom
to produce)
All this is tackled by the theory of demand,
theory of production, analysis of market
structure, profit management etc…
5. External Environment
Macro economics deals with the general
business environment in which a business
operates.
Related to the over-all economic, social and
political environment of the country.
6. MicroandMacroParadox
What is true for an individual is not true for the
economic as a whole!!
Individual saves and invests income
increases.
The economy saves more consumption
expenditure decreases reduce aggregate
demand, investment and income.