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Papua New Guinea
DIVINE WORD UNIVERSITY
FACULTY OF HEALTH SCIENCE
DEPARTMENT OF HEALTH MANAGEMENT
HM302 MICROECONOMICS
Lecture Mr. Sion
Assessment Task #2: Written Assignment
Task 2.1: Descriptive Essay
Criteria: Identify economic theories/models and their significance in relation to the role of decision making
Length: 2000 words
Task 2.1
Explain what microeconomics is and what significance it has on decisions made at the different sectors within the economy of PNG.
By Philip George HM3
February 2013
Introduction
As all the other fields of study which can be broken down to specific areas to deal with consciously, the field of economics is classified into two broad branches. The two broad branches are differently defined as the base term economic is added to two different prefixes, ‘macro’- and ‘micro’- respectively. By adding the base term economic to prefixes macro- and micro- accordingly, the field of economics is being specified to two broad branches. That is, macroeconomics and microeconomics which in general terms, macroeconomics is the economic that concerns a nation as whole whereas microeconomics concerns with individual, household, and firms. The term economics itself possesses its definition when relating production, consumption and distribution of wealth to societies. According to (Investopedia, 2013) economics is “A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants.”
This essay will explain only microeconomics as one of the two branches of economy, the sectors of the economic system and the economic theories and models.
What is Microeconomics?
As elaborated in the introduction the term microeconomic constitutes the prefix micro- and base economic were the prefix micro- means small, thus Microeconomics is the study of the economic behaviour of small economic groups (About.com, 2013). At micro or the small branch...