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    1. Please define microeconomics and macroeconomics.
    2. Please state the law of demand and law of supply and explain how the law of demand and the law of supply interact to bring about equilibrium.
    3. Please explain the importance of substitution to the laws of supply and demand and give a real-world example.

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    Concepts of Economics

    Answer 1
    Microeconomics: This is the branch of economics, which study the patterns of how individuals, firms and households develop decisions to apportion the available resources, particularly in the markets, where the transactions of goods and services take place. It examines the behavior of individual by considering their demand for a good and from the market demand, of the good. It deals with the product and factor pricing. Micro-economics is associated with the interaction between the individual buyers and sellers. Specifically, it emphasizes on the modes of supply and demand. Apart from this, it also examines the determination of output and price in an individual market like coffee industry (McConnell & Brue, 2004).
    Macro-economics: It studies the structure, performance and behavior of national and regional economy of the Country. It examines the patterns and methods that state, how the large aggregates like total employment, general price level and national income are determined. It is the larger concept as compared to micro-economics, as it assists the individuals to gain an in-sight about the basic knowledge to perform in the business environment. It examines the effect of fiscal and monetary policies. Apart from this, it also analyzes the total ...

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