Introduction to Micro and Macro Economics

Comprehensive vocabulary flashcards covering the definitions, scope, features, and importance of Micro and Macro Economics as presented in the lecture notes.

General Theory of Employment, Interest and Money

The famous book published by Maynard Keynes in 1936 which used a macro economic approach to analyse economic problems.

Micro Economics

A branch of economics that deals with a small part of the national economy, studying the actions and behaviour of individual units such as consumers, firms, or prices of particular commodities.

Maurice Dobb's definition of Micro Economics

"Micro economics is in fact a microscopic study of the economy."

Prof A. P. Lerner's definition of Micro Economics

Consists of looking at the economy through a microscope to see how individuals or households as consumers and individuals or firms as producers play their part in the working of the whole economic organism.

Theory of Product Pricing

A part of micro economics that explains how the price of an individual commodity is determined by market forces of demand and supply.

Theory of Factor Pricing

A part of micro economics that helps in determining factor rewards for land, labour, capital, and entrepreneur in the form of rent, wages, interest, and profit.

Efficiency in production

Producing the maximum possible amount of goods and services from the given amount of resources.

Efficiency in consumption

Distribution of produced goods and services among the people for consumption in such a way as to maximize total satisfaction of the society.

Overall economic efficiency

The production of those goods which are most desired by the people.

Price Theory

A synonym for micro economics because it deals with the determination of the prices of goods and services as well as factors of production.

Partial Equilibrium

An analysis that isolates an individual economic unit from other forces and studies its equilibrium position independently.

Ceteris Paribus

A fundamental assumption in micro economics meaning "Other things remaining constant."

Slicing Method

The method used in micro economics to split or divide the whole economy into small individual units to study each unit separately in detail.

Marginalism Principle

A key tool of micro economics where 'marginal' refers to the change brought in total by an additional unit.

Free Market Economy

An economy where economic decisions regarding production (what, how much, and how to produce) are taken at individual levels without government intervention.

Macro Economics

The branch of economics that analyses the entire economy and deals with aggregates such as total employment, national income, general price level, and inflation.

J. L. Hansen's definition of Macro Economics

The branch of economics which considers the relationship between large aggregates such as the volume of employment, total amount of savings, investment, and national income.

Prof Carl Shapiro's definition of Macro Economics

The branch of economics that deals with the functioning of the economy as a whole.

Theory of Income and Employment

A component of macro economics that explains factors determining levels of national income and employment and causes of fluctuations in them.

Income Theory

A synonym for macro economics because it studies the concept of national income, its measurement, and the causes of fluctuations that lead to business cycles.

General Equilibrium Analysis

The macroeconomic study of the behaviour of demand, supply, and prices in the whole economy.

Lumping Method

The macroeconomic approach of studying the whole economy rather than its parts, compared by Prof. Boulding to studying a forest rather than individual trees.

Mahalanobis growth model

A growth model studied in macro economics that emphasized basic heavy industries for economic development.

General Price Level

The average of all prices of goods and services currently being produced in the economy.