[mahy-kroh-ek-uh-nom-iks, -ee-kuh-] Pronunciation Key ) | the branch of economics dealing with particular aspects of an economy, as the price-cost relationship of a firm. |
Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.
| mi·cro·ec·o·nom·ics
(mī'krō-ěk'ə-nŏm'ĭks, -ēk'ə-) Pronunciation Key
n. (used with a sing. verb) The study of the operations of the components of a national economy, such as individual firms, households, and consumers. mi'cro·ec'o·nom'ic adj. |
The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2006 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
| microeconomics | |
noun | |
| the branch of economics that studies the economy of consumers or households or individual firms |
microeconomics
Economic analysis of particular components of the economy, such as the growth of a single industry or demand for a single product. (Compare macroeconomics.)
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
Microeconomics
The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets (e.g. coffee industry).
Investopedia Commentary
The field of economics is broken down into two distinct areas of study: microeconomics and macroeconomics. Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it. People who have any desire to start their own business or who want to learn the rationale behind the pricing of particular products and services would be more interested in this area.
Macroeconomics, on the other hand, looks at the big picture (hence "macro"). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world. For example, people who study this branch of economics would be able to interpret the latest Gross Domestic Product figures or explain why a 6% rate of unemployment is not necessarily a bad thing. Thus, for an overall perspective of how the entire economy works, you need to have an understanding of economics at both the micro and macro levels.
Related Links
Economics Basics Tutorial
Macroeconomic Analysis
See also: Aggregate Demand, Aggregate Supply, Economics, Economy, Equilibrium, Gross Domestic Product - GDP, Keynesian Economics, Law of Demand, Macroeconomics, Unemployment Rate
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