Difference between micro and macro economics - Economics - Introduction

Question

Difference between micro and macro economics

Pushpak Popli · Accepted Answer

Solution:

Points of Difference

Microeconomics

Macroeconomics

1

Study matters

It studies individual economic units like households, firms,
consumers, etc

It studies the 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 sectors 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
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 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

Points of Difference		Microeconomics	Macroeconomics
1	Study matters	It studies individual economic units like households, firms, consumers, etc.	It studies the 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 sectors 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 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 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