Macro and Micro Economics

Micro Economics- Micropolitical economy is a branch of economics that analyzes the merchandise behavior of individual consumers and firms in an prove to understand the decision- qualification process of firms and households. It is come to with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and hold and the determination of charge and output in individual markets (e. g. coffee industry). Areas microeconomics covers Supply and demand ?Competition ?Monopolies ?Profit and dismission ?Opportunity cost Elasticity Rigid laws- Businesses may be luckless to be non starters due to restrictive business environment which may pursue the form of rigid government laws ( no polluting industry can forever be located in around 50 Km spoke of the Taj) , state of competition ( Car manufacturing capacity stand forly in the orbit is far in excess of demand) etc. Environment impact- The present and future viability of an enterprise is impacted by the environment For eg no TV manufacturer can be expected to survive by making only B&W television sets when consumer preference has any the way shifted to color television sets. Key Inputs- The availability of all key inputs ilk skilled dig out , trained managers, raw materials, electricity, transportation, fuel etc ar a factor of the business environment. Public awareness- Increasing public awareness of the negative aspects of certain industries like hand woven carpets (use of child labor ) , pesticides (damage to environment in the form of chemical residues in groundwater), plastic bags (choking of sewage lines) nonplus resulted in the slow decline of some industries. The Market- Organizations most monitor their customer markets in order to adjust to changing tastes and preferences.A market is people or organizations with wants to satisfy, money to spend, and the willingness to spend it. Each gull market has distinct needs, which need to be monitored. It is imperative for an organization to hump their customers, how to pass around them and when customers needs change in order to adjust its merchandising efforts accordingly. The market is the focal point for all marketing decisions in an organization. trade Intermediaries- Physical distribution firms help the organization to stock and move products from their points of profligate to their destinations.Warehouses store and protect the goods before they move to the next destination. Marketing proceeds agencies help the organization target and promote its products and acknowledge marketing investigate firms, advertising agencies, and media firms. Financial intermediaries help finance transactions and insure against risks and include banks, consultation unions, and insurance companies. Macro Economics- Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decisi on-making of the entire economy.This includes a national, regional, or spheric economy. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. In Macroeconomics there are ii areas of research that are emblematic of the correct the attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income).Areas of macroeconomics covers ? funds supply ?Interest rates ?Fiscal and monetary policy ?Unemployment ? step-up ?Inflation ?Inflation- In recent years, a confluence of macroeconomic and industry-specific factors has led to record-high prices and unprecedented volatility in the global rustic good markets. Specifically, simultaneous increases in demand and mathematical product costs along with intensify supply-side pressures affirm led many exp erts to forecast extended designs of higher-than-average prices for many commodities.Farm-based commodities wee recently experienced unprecedented growth in demand from some(prenominal) traditional and non-traditional sources. Traditional demand has change magnitude primarily via worldwide community growth. The worlds population currently exceeds 6. 5 billion, is projected to reach almost 9. 5 billion by 2050. Increases in demand fall in also been driven by global industrializations confirming effect on disposable income in emerging economies like china and India.As a result, citizens of these countries commence begun to shift away from the grain-centric diet of evolution countries to the protein-rich diet common to countries with higher per capita GDP. Because, on average, one pound of protein requires tight seven pounds of grain to seduce, the increase in demand for meat has a large multiplier effect on the demand for grain. Moreover, increased globalization, bare tr ade, and currency exchange considerations have increased agriculture-based exports from producing countries like the U. S. Canada, and Australia, as easily as Europe and South America, which has increased competition and intensified demand on a global scale. In addition to traditional food-related demand, loose grains such as give, sorghum, barley, oats, and rye and edible oils and edible oil products have experienced exponential demand growth due to the rapidly expanding biofuels go-ahead in the fall in States, Brazil, and the European Union. The World Bank estimated that nearly all of the increase in global corn production between 2004-2007 was use for biofuels production in the United States.Moreover, as evidenced by relation backs recent mandate to increase domestic ethanol production nearly five-fold by 2022, the biofuels component of uncouth commodity demand is non likely to decline in the near, or even intermediate, future. Most agricultural commodities are also exper iencing significant supply-side pressure from a variety of sources. new-fangledly, the global supply of agricultural commodities has been severely affected by unfavorable run conditions (e. g. , droughts, flooding, and freezes) in several regions, including the U. S. , Europe, Canada, Argentina, Ukraine, and Russia.As a result, global stockpiles of agricultural commodities have fallen to their lowest levels in many years. At the same time, increased competition for fur-bearing crop land and the reconfiguration of planting decisions to maximize returns from biofuels-related plantings (e. g. , corn and soybeans) have drastically affected the supplies of most agriculture commodities. Significant increases in production costs, led by record oil and fertilizer prices, and increase scarcity of productive farmland and sufficient and accessible water supplies have further contributed to limits on worldwide production capacity.Finally, political unrest in producing countries has slowed or stopped production on otherwise physically productive land, further tightening supplies. Unlike many other commodities, agricultural commodities are crucial to the survival of nations. In a recent study, researchers concluded that nearly 60 percent of all global conflicts over the past two decades have been primarily driven by disputes related to food, land, or water. Recent spikes in food prices have lead to food smuggling in some countries and riots in others.Because of the universal necessity for food and the irreplaceable division that agricultural commodities have in worldwide food production, market analysts, including the United Nations Food and Agricultural Organization (FAO) predict that when commodity supplies eventually witness and prices moderate from current high levels, the new equilibrium prices will be significantly higher than has traditionally been observed during periods of market balance. As summarized in the table below, even when the volatility is removed f rom short-term prices, long-run ommodity price projections forecast equilibrium prices for most major crops that are 19 to cx percent higher than their recent five-year average. The preceding analysis suggests agribusiness and agricultural-related firms may present interesting investment opportunities. Companies with operations and/or substantial investments in one or more key grain producing nations, such as the U. S. , Canada, Europe, Russia, Brazil, and China, may be favorable over countries operating primarily in resource poor nations.Companies with significant command over their supply stove are likely to display significant operating advantages, but because of the capital-intensive temperament of the industry, especially for companies with significant supply chain investment, firms with low debt, good credit rating, and/or relatively easy access to credit markets are preferable in light of current global economic conditions. Moreover, any caller with significant supply ch ain investment should be providing logistical synergies and optimizing in force(p) operation of all its assets.In particular, companies that invest in technology to produce more robust, more efficient farmland and crops may provide alone(predicate) opportunities for investment in the short- and intermediate-term. In summary, although current prices and volatility may not be sustainable in the long term, the long-term factors affecting agricultural commodities will most likely result in an extended period of high, although not necessarily record, prices. As a result, investments in agriculturally-oriented firms appear to be promising over intermediate- and long-term horizons.