Microeconomic Policy (1 Viewer)

[SGSII]

Hi Guys

What is a microeconomic policy?

So basically i need help in explaining what it is in a way in which i can understand

Ive been through textbooks and websites and such but it was still a bit confusing :S

Any help is appreciated
Thanks

 

[krnofdrg]

Hi Guys

What is a microeconomic policy?

So basically i need help in explaining what it is in a way in which i can understand

Ive been through textbooks and websites and such but it was still a bit confusing :S

Any help is appreciated
Thanks

So in Economics there is mainly two branches. Macro and Micro.

So Microeconomic policies are ones that deals with individual consumers, industries and firms. It focuses on the interaction between these individual parties (Buyers and sellers) and also factors that influence their decision. To put it simpler, Microeconomics looks at the smaller picture of things . It also mainly focuses on the patterns of supply and demand and the determination of price and output in Individual markets. For example in Car markets or Orange markets.

On the HSC level you focus on things such as Deregulation, Privatization, Global Trade Policy, Labour policies and industry, Corporatisation and much more things. With the focus on efficiency, productivity and many other things from what I can recall.

Whereas Macro would focus on the national economy as a whole, for example a 6% common unemployment rate or 4% inflation rate, they affect the whole economy? It focuses on a very much broader picture.

 

[Leffife]

Well in simple terms, I will just give a quick overview of Microeconomic Policy.

- Microeconomic policies are aimed at individual industries to improve efficiency & productivity of producers, and thus, the allocation of resources in markets and between various sectors of the economy.

- The improve efficiency as I said before, are achieved by raising of labour, multifactor productivity & capital according to productivity measures.

- Successful if they improve the efficiency of resource allocation & raise productivity in the 'long-term'.

- Some main features of microeconomic policies:
1) Directed at aggregate supply.
2) Directed at product markets & factor markets.
3) Aim to improve resource allocation - long term.
4) Target: Government & Business Enterprises.

- Require structural change in the economy to make the economy more productivity, competitive and efficient.

Some examples of market induced type structural changes: (this will be general)
1) We have been influenced increasing by China.
2) There was technological change and we now use ICT base related things to production costs & prices.

That's about it for the moment. For next year, you will get into more detail and will learn the following:
- Structural Changes
- Policy Market & Factor Market Reform
- Regulation & Deregulation

And others. But this is about a good enough introduction to keep you going.