Goal: Learn the Different
Types of Economics 9/21/11
Microeconomics
-is the study of individuals, families, and businesses in an
economy
-looks at small segments of the economy
-Studies different markets (Consumer, Business, Labor)
-measures things like price of a specific product, the
number of workers at a business, the income of a
household
Topics include: Prices, Costs, competition, consumer
behavior
-In Micro, "you look at the sand, the rock, and the shells
not the whole beach"
Macroeconomics
-Is the study of the economy as a whole and is concerned
with large-scale economic activity
-Studies Economic Growth, Economic Stability,
International Trade
-Instead of looking at one person, one household, or one
business like in Micro, Macro lumps together millions of
people and households, and hundreds of businesses
Types of Econ Per 8 Page 1
-Analyzes total income, total output, and total
employment
-Topics include: Money, banking, taxes, government
spending, unemployment, and inflation
Micro or Macro?
1. National Unemployment Figures Rise
2. World Trade Organization Meets
3. Shipbuilder wins Navy contract
4. Cab Drivers go on strike
5. Gasoline Prices go up 25 cents
Positive Economics
-studies economic behavior as it is
-focuses on facts
-based on economic theory
-avoids value judgments
-uses scientific the scientific method
-"is what it is"
Normative Economics
-uses value judgments
-policy economics
-goes beyond the facts to ask if actions are good
-recommends what economy should be like
-"is what it ought to be"
Positive or Normative Economics?
Types of Econ Per 8 Page 2
1. Because of scarcity, everyone must make choices.
2. Americans buy too many cars and do not use public
transportation enough.
Exit Question: What is the main difference between
microeconomics and macroeconomics?
Types of Econ Per 8 Page 3