Chapter 7. International, National, and Local Economics. Economics is a social science that analyzes the choices made by people and governments in allocating scarce resources. While this definition sounds rather scientific, most people have a fairly intuitive understanding of the laws of supply and demand. | O-hopier International National and Local Economics Economics is a social science that analyzes the choices made by people and governments in allocating scarce resources. While this definition sounds rather scientific most people have a fairly intuitive understanding of the laws of supply and demand. When making purchasing decisions we all decide what products or activities fit into our schedules budgets and needs and through these economic choices we vote for what we want to be available in our market and at what price. The economic system is the social institution through which goods and services are produced distributed and consumed. As you can surmise the economic decisions that we make affect economic systems that are often global in scope. There is a combination of domestic and international policies that allocate resources commodities labor tariffs and so on that go into the price composition of the goods and services that we purchase and consume. These factors however emerge on a couple of different levels that economists study microeconomics and macroeconomics. 124 TLFeBOOK International National and Local Economics 125 MICROECONOMICS AND MACROECONOMICS Microeconomics is the study of small economic units such as individual consumers families and businesses. It is the study of the individual parts of the economy and how prices are determined and how prices in turn determine the production distribution and use of goods and services. Macroeconomics refers to the study of a country s overall economic issues. Although these two disciplines are often addressed separately they are interrelated as macroeconomic issues help shape the decisions that affect individuals families and businesses. Another area of economics focuses on the global impact of emerging markets. The financial markets of developing economies in Asia such as China India Indonesia Malaysia South Korea Taiwan and Thailand are among the most important. In Latin America Argentina Brazil Chile .
