difference between microeconomics and macroeconomics
Points of Difference | Microeconomics | Macroeconomics | |
1 | Study matters | It studies about individual economic units like households, firms, consumers, etc. | It studies about an economy as a whole. |
2 | Deals with | It deals with how consumers or producers make their decisions depending on their given budget and other variables. | It deals with how different economic sectors such as households, industries, government and foreign sector make their decisions. |
3 | Method | It uses the method of partial equilibrium, i.e. equilibrium in one market. | It uses the method of general equilibrium, i.e. equilibrium in all markets of an economy as a whole. |
4 | Variables | The major microeconomic variables are price, individual consumer’s demand, wages, rent, profit, revenues, etc. | The major macroeconomic variables are aggregate price, aggregate demand, aggregate supply, inflation, unemployment, etc. |
5 | Theories | Various theories studied are: 1) Theory of Consumer’s Behaviour and Demand 2) Theory of Producer’s Behaviour and Supply 3) Theory of Price Determination under Different Market Conditions | Various theories studied are: 1) Theory of National Income 2) Theory of Money 3) Theory of General Price Level 4) Theory of Employment 5) Theory of International Trade |