Micro-economics

Micro-economics-It is a study of economics at an individual group or company level. It seeks to solve problem on small levels
Macro-economics-IT is a study of national economy as a whole.
Example- Common focus on macro economics might study the way taxes affect the economics of the nation.
Principals-People face trade offs.
When we go for shopping and get confused what to buy and what not to buy and end up buying nothing.
Confusion of what to do or what not to do are all about facing trade offs.

Measure-we need to do cost benefit analysis.
The cost of something is what you give up to get it.If you want something you need to sacrifice. It is called opportunity cost

Rational people think at margin
We booked a SL class and we have a waiting list of 50 and in AC-3 there is a vacancu of 10 seats. What if I shift 10 people feom SL to AC. We are running AC for all people, blankets pillows are there for everyone so the expenditure we are incurring is zero. The marginal cost is zero but we are gaining from 10 people.
People respond to incentives
Its all about how you put incentives to attract people.
Example- Make in India
Here also there is a fact on incentives. Until and unless India is giving attractive incentives to foreign countries for eg. The ease of doing business in India is a kind of incentives which India can provide they will not do business in India.