Long Run

How a Long Run Works A long run is a time period during which a manufacturer or producer is flexible in its production decisions. Businesses can either expand or reduce production capacity or enter or exit an industry based on expected profits. Firms examining a long run understand that they cannot alter levels of production in order […]

Budget Line

The budget line is defined as, “The locus of all combinations of commodities which cost some fixed amount of money while the prices are held as constant.” This line shows the various amounts of two or more commodities with a given amount of money a consumer can buy when the relative prices are held as […]

Macro dynamics

  All the economic factors are changeable. With the pace of time, the factors like population, capital, technology, production method, forms of business organization, nature and desire of people etc change that affect to the aggregate demand and aggregate supply. In this macro dynamics, we discuss the process of change from one equilibrium level to […]

Macro-static

  Generally every economic activity is affected by size of population, the supply of capital, methods of production, forms of business organization, desire of people etc. Macro-static explains the aggregate relation in a stationary state. It shows the equilibrium of an economy at particular point of time. The macrostatics analysis explains the relation among these […]

What business economics is about? 

  What is economics that means meaning of micro and macro-economics, their importance, types, limitations, their interdependence, their differences and many more. Now, it is time to know how business and economics are attached to each other. That is what we mean by business economics. During production and distribution process, a business firm faces the […]

Difference between microeconomics and macroeconomics

  Although micro and macroeconomics both are important aspects of economics, they both have different meaning and working way. Microeconomics Macroeconomics 1.   It is concerned the individual quantities, income price output.   1.   It is concerned to aggregates of  individual quantities, national income, general price level & national output 2.   It studies the aggregates related […]

Interdependence of Micro and Macro Economics

  Microeconomics and macroeconomics are two major branches of economics. So, they both are interdependent. Firm wise, individual wise, sector wise, district wise study of any economic activity is microeconomics. Overall study of all those study is macro study. So, any change in firm or individual or sector or district strongly affect to the national […]

Limitations of Macroeconomics

  Although macroeconomics deals with all the national problems and provides various measures, it signifies various national contemporary situations; it has some limitations in practical field. They are – ►   Fallacy of composition: Sum total of individual activities is aggregate economy. But what is true for individual may not be true for whole economy. For […]

Limitation of microeconomics

  Microeconomics is most important branch of economics. It is also known by foundation for whole economic analysis. It describes about the individual behavior of society and firm. According to William Flenar,”Micro economics is related to the individual decision making units.” It tells us how price and output level of any commodity is determined? How […]