<Last updated 13.04.2020>
Hi! If you are interested in Economics, I’ve prepared the below to help your understanding. You should take a look at this short article where I explain the difference between “Microeconomics and Macroeconomics.”
The great science communicator Carl Sagan once said: “the earth is a very small stage in a vast cosmic arena”. And in this small stage we are all performing economic activities. Why? because we want to live, to sustain our existence by satisfying our needs, and that pursuit requires us to utilize the resources we have available and can be found in this small stage.
A scientist, or better to say, a researcher, is an observer of the world. This individual observes and records the activities of human beings, how are these beings communicate with each other? What types of economic activities they perform? What do they do when prices fall? How do they react when a discount is advertised? How do they take decisions in times of crisis or in times of prosperity? All these questions belong to the field of social sciences and so you understand now that Economics belongs in the category Social Sciences.
In the area of economics, the economist studies the behavior of individuals, groups and even small or large organizations. That person will carefully collect data and information, analyze them and use scientific methods to build theories that can help in explaining that behavior.
The question is… Why? The answer is: people care about the economy. We want to know about the economic activities of all people in this “stage”. We are all part of it and our quality of life depends on how well we are all performing. How well the economy as a whole is performing that is.
Economics is composed of two “branches”, Microeconomics and Macroeconomics.
> In Microeconomics, we study the behavior of individual entities. We analyze the behavior of households, businesses, industries, different markets, labor unions, or trade associations.
> On the other hand, in Macroeconomics, we are interested in studying the behavior of the aggregate economy, so it examines aggregate levels of income, employment, the levels of interest rates, prices, inflation, and the famous business cycles.
Economic Science exists because people need help in solving their main economic problem. To sustain life, and improve our quality of life, we inevitably require the use of resources on a continuous basis.
“I hope I am clear on this one. If not, contact us on social media and we will do our best to help you.
Thank you for reading my articles and watching my videos.”