Consumption - What is Microeconomics? Normative and positive economics Positive Economic questions are ones which start "what would happen if native Economic questions are ones which start "what should happen if economics courses describe themselves as positive. This is one of them However, normative issues creep into everything the two types of economic uestion cannot be separated so easily. Consumption- What is Microeconomics? Microeconomics and macroeconomics Microeconomics is the study of little things: Firms, consumers etc. Macroeconomics is the study of big things: Economies as a whole etc. As easy as that, right? Well, yes and no. Often both macro and micro study the same phenomenon Another way of distinguishing between the two is the method they use to study Micro starts with the little things and works up- macro starts with the big hings and works down Often it is the modelling metholodogy which separates the twoConsumption — What is Microeconomics? 7 Normative and Positive Economics • Positive Economic questions are ones which start “what would happen if...” • Normative Economic questions are ones which start “what should happen if...” • Most economics courses describe themselves as positive. This is one of them. • However, normative issues creep into everything — the two types of economic question cannot be separated so easily. Consumption — What is Microeconomics? 8 Microeconomics and Macroeconomics • Microeconomics is the study of little things: Firms, consumers etc. • Macroeconomics is the study of big things: Economies as a whole etc. • As easy as that, right? Well, yes and no. Often both macro and micro study the same phenomenon. • Another way of distinguishing between the two is the method they use to study these phenomena. • Micro starts with the little things and works up — macro starts with the big things and works down. • Often it is the modelling metholodogy which separates the two