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University of Wah Wah Engineering College Assignment # 01

Macroeconomics deals with the performance and structure of an economy as a whole, focusing on aggregates like national income and output, general price levels, and factors influencing growth. Microeconomics analyzes individual markets and decision-making entities like households and firms. In country economics, macroeconomics helps achieve goals like economic growth and employment, while microeconomics ensures efficient resource use, international trade gains, and market mechanisms that determine prices and allocate resources.

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47 views4 pages

University of Wah Wah Engineering College Assignment # 01

Macroeconomics deals with the performance and structure of an economy as a whole, focusing on aggregates like national income and output, general price levels, and factors influencing growth. Microeconomics analyzes individual markets and decision-making entities like households and firms. In country economics, macroeconomics helps achieve goals like economic growth and employment, while microeconomics ensures efficient resource use, international trade gains, and market mechanisms that determine prices and allocate resources.

Uploaded by

HAMZA KHAN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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University of Wah,

Department of Electrical Engineering


Document No: UW/EE/AF/REV00

UNIVERSITY OF WAH
WAH ENGINEERING COLLEGE
Electrical Engineering Department
Assignment # 01
Course Title: Engineering Economics & Mgt Course Code: MS-224
Semester & Section: 4th_ Course Teacher: IJAZ HASNAIN
Total Marks: Submission Date: Feb 21, 2018
Student Name: AMIR HAMZA RegNo. UW-17-EE-BSC-004

Assignment Title:
Micro and Macro economics

Course Learning Program Learning Learning


Outcome Outcome Domain

CLO-1 PLO-6 Cognitive-2

PLO-6: Engineering and Society: An ability to apply reasoning informed by contextual knowledge to
assess societal, health, safety, legal and cultural issues and the consequent responsibilities relevant to
professional engineering practice and solution to complex engineering problems.
CLO-1: Understand the fundamentals of economics to assess the social issues.

Q. No. 1 Marks 10 PLO-6, CLO-1

Compare macroeconomics and microeconomics, briefly explain their role in country economics.
Comparison of Macroeconomics & Microeconomics

Basis For Comparison MACROECONOMICS MICROECONOMICS

Macroeconomics is a branch of Microeconomics is the branch of


economics dealing with the economy which is concerned with the
Definition performance, structure, behavior, behavior of individual entities such as
and decision-making of an economy market, firms and households.
as a whole.

It is the study of economy as a It is the study of individual


whole and its aggregates. economic units of an economy.
Economic Unit

Its central problem is Its Central problem is price


determination of level of income determination and allocation of
Central Problem
and employment. resources.

Its main tools are aggregate Its main tools are demand and supply
demand and aggregate supply of of a particular commodity/factor.
Main Tools economy as a whole.

It helps to solve the central It helps to solve the central problem


problem of full employment of of what, how and for whom to
Use
resources in the economy. produce in the economy.

It is concerned with the It discusses how equilibrium of a


determination of equilibrium level consumer, a producer or an industry
Equilibrium Analysis
of income and is attained.
employment of the economy.

Covers various issues like Covers various issues like demand,


national income, general price supply, product pricing, factor
Scope level, distribution, employment, pricing, production, consumption,
money etc. economic welfare etc.

Page 1 of 3
Maintains stability in the general Helpful in determining the prices of a
price level and resolves the major product along with the prices of
problems of the economy like factors of production (land, labor,
Importance inflation, deflation, reflection, capital, entrepreneur etc.) within the
unemployment and poverty as a economy.
whole.
It has been analyzed that 'Fallacy It is based on unrealistic
of Composition involves, which assumptions, i.e. In microeconomics
sometimes doesn't proves true it is assumed that there is a full
Limitation because it is possible that what is employment in the society which is
true for aggregate may not be true not at all possible.
for individuals too.
The macroeconomics takes a top- While analyzing any economy,
down approach into the microeconomics takes a bottom-up
Approach consideration. approach.

National income, national Individual income, individual


savings, general price level, savings, price determination of a
Examples aggregate demand, aggregate commodity, individual firm's output,
supply, poverty, unemployment consumer's equilibrium.
etc.

Role of Macroeconomics in Country Economics:


It helps to achieve the goal of economic growth, a higher GDP level, and higher level of employment. It
analyses the forces which determine economic growth of a country and explains how to reach the highest state
of economic growth and sustain it.
The scope of macroeconomics includes the following theories:

 National income
 Money
 Economic growth
 Employment
 Price levels

Page 2 of 3
Role of Microeconomics in Country Economics:
 Microeconomics is concerned with how supply and demand interact in individual markets for goods and
services.
 Microeconomics is helpful in the efficient employment of the limited, scarce resources of a country.
 It is also helpful in the development of international trade. It is used to explain the gains from
international trade, balance of payment disequilibrium and the determination of foreign exchange rate.
 One goal of microeconomics is to analyze the market mechanisms that establish relative prices among
goods and services and allocate limited resources among alternative uses.
 It also deals with the effects of economic policies (such as changing taxation levels) on the
aforementioned aspects of the economy.

THE END

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