Basic Terms and Concepts of Economics - Part 2

Macroeconomics explains why the economies face the phases of business cycles like boom and trough and focus on international trade. It is a branch of economics that deals with economic aggregates, such as national income, unemployment, etc.

Factors of production are divided into 2 groups factor inputs and non-factor inputs. Land and labour are known as factor inputs.

Raw material, fuel, etc. are considered as non-factor inputs.

The receiving of the producer after the sale is called Revenue. The payments to the owner of inputs made by the producer are called the cost of production. The difference between revenue and cost is known as profit or loss.

Firms refer to units producing commodities or services with the aim of profit. Firms generate goods and services by employing the factors of production and sell their produce in the market.

Modern economists have segregated the subject matter of economics into microeconomics and macroeconomics.
Microeconomics: It is the branch of economics that studies the behaviour of individual economic agents, like a consumer, a firm, etc.
Macroeconomics: Macroeconomics is a branch of economics that deals with economic aggregates, such as national income, unemployment, etc.