and regulations affect decisions about production and consumption.

It should be clear by now that economics covers considerable ground. We can divide that ground into two

parts: Microeconomics focuses on the actions of individual agents within the economy, like households,

workers, and businesses. Macroeconomics looks at the economy as a whole. It focuses on broad issues such as

growth of production, the number of unemployed people, the inflationary increase in prices, government

deficits, and levels of exports and imports. Microeconomics and macroeconomics are not separate subjects,

but rather complementary perspectives on the overall subject of the economy.

To understand why both microeconomic and macroeconomic perspectives are useful, consider the problem of

studying a biological ecosystem like a lake. One person who sets out to study the lake might focus on specific
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