APPLY THE CONCEPT OF MAN’S ACTIVITIES, BEHAVIOUR, CHARACTER AND

PERSONALITY WITH REGARDS TO MICRO AND MACRO ECONOMICS. USE

EXAMPLES FOR EXPLANATION AND ARTICULATION FROM ADVERTISING
INDUSTRY IN ZIMBABWE.

Micro economics and macroeconomics are two different perspectives on the economy. The
micro economic perspective focuses on the parts of economy in individual firms and
industry: demand and supply, cost of production, opportunity cost, measure of elasticities just
to mention a few, while macroeconomic perspective looks at the economy as a whole
focusing on goals like investment, unemployment, aggregate demand of supply. The
following essay will intend to apply the demands of the question in giving examples and
articulation from advertising industry in Zimbabwe.

In micro economics, supply and demand is an economic model of price determination in

market. Demands refers to how much quantity or product is desired by buyers. The quantity
demanded is the amount of a product people are willing to buy. For example, Zimbabwe
advertising industry is seriously struggling for survival in an inexorably deteriorating
economic environment. The political economy of the media has changed dramatically,
Zimbabwean advertising industry is struggling as audiences migrate online, while advertisers
lag-behind, creating a disequilibrium which brings instability in relation to the supply,
demand and prices of media products: newspapers and magazines. Zimpapers and Apha
Media Holdings they have forced to retrench workers, downsizing, slashing salaries, removal
of benefits and changing business models for example h-metro price cut from $1 to $
0.50cents. This is a result of consumer behaviour towards the print media facilities as they
prefer online streaming therefore this has an impact in affection the firm production.

More still cost of production in micro economics refers to the cost incurred by a business
when manufacturing a good or providing services. Production cost include a variety of
expenses, such as labour, raw material, consumable manufacturing industry. For cost to
qualify as a production cost it must directly tied to the generation of revenue for the
company, this can be achievable by engaging advertising industry to market the product for
desirable results for example outdoor advertising facilities for coca-cola products, it is cost
effective way of reaching customers and offers a good return in revenue due to its low cost
per view. It is viewed for free by its target market as opposed to print, tv and internet each of
which carry an additional cost to the consumer and it can also effectively remind consumers
about the same advertising campaigns in other media, also coca-cola advertised on their cans
written names of people which increased its sales and also “high five everybody” referring to
oneness this also increases the sales.

Furthermore, micro economics consist of elasticity it suggests that the demand for the good
or services is affected by the price. A value that is less than 1 suggest that the demand is
insensitive to price, for example insulin is a product that is inelastic. For consumers the
demand is so great that price increase has very little effect on the quantity demanded; most of
those who need insulin aren’t holding out for lower prices and are already making purchase.
Firms that are inelastic on the other hand, have products and services that one must have
enjoy the luxury of setting higher prices, by doing so means that consumers will remain loyal
and continue to purchase the goods even in the face for a price increase Elasticity can be
calculated using the following formula

Elasticity =%change in quantity over %change in price

Still in the same vein for any firm that intent to markets its product, buyers must be viewed as
scarce resources, opportunity cost refers to the best alternative on making decisions, this
includes transforming potential buyer into active buyers, the minimum required is to inform
the former about the existence of the product and about its physical, spatial and economic
characteristics, this type of information can be performed with a degree of precision through
personalised advertising. It’s a basic relationship between scarcity and choice. Opportunity
cost can be calculated as follows: opportunity cost = return of most lucrative option not
chosen – return of chosen option. For example, television advertisement in Zimbabwe is
expensive as compared to billboard advertisement and billboard advertisement is sure to
reach many audiences as compared to television.

However, macroeconomics, is an economic branch of economics which deals with the

decision making of the whole economy. For example, investment in Zimbabwe can be further
emphasised by the mantra Zimbabwe is open for business, thus appealing for both
international and local investors to invest in Zimbabwe. This includes investments in
industrial, farming, mining as this can be further emphasised by adverts being billed by the
public broadcaster ZBC TV to boast investor confidence in the country.

Stillmore, macroeconomics, consist of international trade in this regard gives consumers and
countries the opportunity to be exposed to new markets and products for example in
Zimbabwe we have ZITF which stand for Zimbabwe International Trade Fair, is popular for
its yearly international business exhibition which take place in Bulawayo. This company is
known for organising and managing international exhibitions and events to promote trade and
investments through innovation and value addition for the benefit of its stake holders.

Unemployment is another thing that macro economy covers, the unemployment rate is a
measure of the prevalence of unemployment and it is calculated as a percentage by dividing
the number of unemployed individuals by all individuals in the currently labour force. For
instance, in the year 2015 there was massive retrenchment as a result of worsening business
environment as the government fails to create opportunities to stimulate industrial expansion.

Inflation is a key concept in macroeconomics, and a major concern for government policy
makers, companies, workers and investors. Inflation refers to broad increase in prices across
many goods and services in an economy. This has impact on the value of country currency.

Aggregate demand as a macroeconomic term describing the total demand in economy for all
goods and services. It is by its very nature general, not specific. All consumer goods, capital
goods, exports, imports and government spending programs are considered equal so long as
they traded at the same market value. AD= C+I+G+Nx. In the case of Zimbabwe is
experiencing low aggregate demand due to difficult macroeconomic environment punctuated
by liquidity and structural constraints, which have resulted in company closures and job
losses, negatively affecting purchasing power of consumers

In conclusion microeconomics and macroeconomics are inter related because their fields of
interest are bound together and cannot be separated, macroeconomics focuses on the system
as a whole while micro economics focuses on the interaction between individual actors in
articulation with the Zimbabwe advertising industry.
REFERENCE LIST

RICHARD G. LIPSEY (1963) An Introduction to Positive Economics. Littlehampton Book

Services Llandybie, United Kingdom.