POSITIVE AND NORMATIVE ECONOMIC, MICROECONOMIC AND MACROECONOMIC

Generally, economic is categorized into Positive and normative economics and micro and macroeconomics

Positive economics

Positive economics is the "what is" of economics. It simply deals with how the economy works. 

 It focuses on the description and explanation If phenomena, as well as the cause and effect relationship. 

It focuses on analyzing economic behavior while avoiding value-based judgment.

For example, "the unemployment rate of Nigeria is higher than that of the U.S.A" is a positive statement since it describes an economic situation but does not provide a clue for addressing the situation.

Normative economics

Normative economic, as the name suggests, describes "what ought to be".

It focuses on what the outcome of economic policy should be.

It is conditional and used to make value-based judgement about the economy.

If one fact changes, normative judgments are given up.

An example of a normative statement is "the price of a book should be $10 to give book manufacturing firm a higher chance of maximizing profits". This statement describes facts and states what should be done.

Microeconomics

Microeconomic is economics on small scale. It studies the economic behavior of individual consumers and firms within the market. Microeconomics deals with small parts of the economy.


The economic interactions of individuals, firms are the focus of microeconomics. It studies the behavior and decision of individuals, households, firms.


Microeconomics studies the behavior of consumers, firms, and industries and how they distribute their limited resources.


Theory of cost, revenue, and profit, Theory of consumer behavior, Theory of production, the theory of consumer welfare, demand, and supply are all primary focus of microeconomic.


Microeconomics answer question like how should households and individuals expend their budgets? What combination of goods and services best fit their needs and wants given their budget? How do people determine whether to work? How should people decide to save for the future? Should firms produce goods and how much should a firm sell? What price should be charged? How many workers should a firm employ?. etc


Macroeconomic

Macroeconomics is economic on a large scale. It studies the entire economy and the issues affecting it.


Macroeconomics' major focus is inflation, unemployment, national income, fiscal policy, monetary policy etc.


It is the study of the economic behavior and the pattern of decision-making of the whole economy.


National and global issues affecting a country's economy are the focus of macroeconomics. Macroeconomic seeks to maximize a national income and empower national economic growth.


Macroeconomic answer question like is our economy progressing? how many goods and services did a nation truly produce? is there an improvement in the standard of living of citizens? How many people are employed and unemployed? 


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