Macroeconomics vs. microeconomics Essay Example | Topics and Well Written Essays - 750 words

Macroeconomics vs. microeconomics - Essay Example Macroeconomics uses the general equilibrium theory to study the economy as a whole. The aggregates used by macroeconomics for the study include national income as well as output, the rate of unemployment and inflation level. It also uses some sub aggregates like spending on consumptions and investments and their components. Macroeconomics also examines the effect of fiscal and monetary policy. It can be characterized as modeling of sectors on the basis of some micro components. The factors that have the potential to affect the long term growth prospects as well as can affect the level of national income is not outside the purview of macroeconomic analysis. The factors that have such kind of potential include changes in technology, capital accumulation and growth of the labor force (Cencini, 2005, p. 2). The models of macroeconomics and the forecasted results determined using those models is in need for the government as well as for the large ownerships as this kind of analysis will h elp them in their path of development and build new strategies of business. Some of the famous macroeconomic models include Aggregate demand and the aggregate supply model and the ISLM model. The once divided fields of monetary policy and the business cycles led to the emergence of macroeconomics. The contribution of J.M. Keynes to macroeconomics cannot be ignored. His book â€Å"General Theory of Employment, Interest and Money† depicts the key concepts of macroeconomics. He offered a modern theory of economics which dealt with the problem on why the market is not clear and eventually a school of economists evolved who seemed to follow the Keynesian theory (Andolfatto, 2005, p. 2). Microeconomics It deals with the behavior of the basic elements within the economy. The agents involved in microeconomics include households and firms. It mainly tries to analyze the behavior of the firms and households with the market (Barro, 1997, p. 3). Microeconomics can be defined as the study of economics that analyses the actions of the individual players and structure of the markets where they operate. Microeconomics takes care of the private, domestic as well as the public players. The study relating to the interaction of these players in the market is called microeconomics. The various structures of market that is examined in microeconomics include perfect competition, monopoly, and monopolistic competition. Production is defined under microeconomics as inputs into outputs. Production can thus be defined as the flow of output over a period of time. The most directly observable attributes under microeconomics are price and quantity. The coordination or the relationship of price with quantity demanded is explained using the law of demand (Dilts, 2004). The law of demand is applied in microeconomics to determine the price and output in a market structure of perfect competition where no sellers or the buyers have the capability to determine or control the market price. Microeconomic analysis is applied by the business firms as they involve themselves in quantitative research and statistical methods with the aim to make strategic decisions. One of the objectives of microeconomics is to analyze the mechanisms of market. It sets up the relative prices amongst the services and the goods and also allocates the limited resources among the many available alternative uses. Some of the significant fields of study under this branch of economics include asymmetric information, general

Marketing in action Essay Example | Topics and Well Written Essays - 1500 words

Marketing in action - Essay Example This is a medium sized care that fits within the requirement of the paper (Smith, Berry, & Pulford 2002). The BMW 3 series model is simply an economy model and very efficient and doing well in the market. This car is approximately 4, 5 meter long and is reported to cost 26,000 dollars and subsequently offers space for five adults. The competitors of BMW 3 series include Audi A4, Opel Vectra, Mercedes Benz C Class, Mazda 6, Volkswagen Passat, and Ford Mondeo (Kotler 1994). The basic reasons that necessitate the division of the market into very small segments include easier marketing. This simply indicates the fact that it is easier to address the various needs of the smaller groups of consumers, specifically if they have several characteristics that are common. Further, it helps in finding the niches which simply means that when the un-served or under-served markets are recognized. Segmentation can make it possible for a new product or company to target a market that is less congested or that which has new consumers (Smith, Berry, & Pulford 2002). Finally, it also helps a company be efficient which simply means efficient use of the marketing resources through focusing on some of the best segments for the offering such as promotion, product, place, and price. Segmentation, targeting and positioning can therefore ensure that the company does not send its messages or products to the wrong individuals (David 2001). Separation of the market simply starts with defining of the entire market. After division of the market into different segments, a particular segment that is seen as profitable should be selected. The very last two steps are reported to be the product positioning within the market and consequently adjusting the proper market mix. Kotler states that four criteria are significant in segmenting a market and include geographical, demographic, psycho graphical, and behavior criteria. Positioning on the