Economic theory emphasizes on the use of the theoretical and mathematical approach to analyze economic models.
While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture – it analyzes the entire economy.
An advantage claimed for the approach is its allowing formulation of theoretical relationships with rigor, generality, and simplicity.
How are collective decisions made? and How do different “rules of the game” (institutions) affect the allocation of resources?