Scribd
Upload
758 views7 pages

Major Difference Between Micro and Macro Economics

Microeconomics focuses on individual units like consumers and firms, and analyzes how small parts of the economy work. Macroeconomics looks at aggregates for the entire economy, such as unemployment, GDP, and inflation. It analyzes economy-wide issues and performance. While microeconomics is static and assumes full employment, macroeconomics is dynamic and studies under employment situations.

Uploaded by

Haren Shylak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
758 views7 pages

Major Difference Between Micro and Macro Economics

Microeconomics focuses on individual units like consumers and firms, and analyzes how small parts of the economy work. Macroeconomics looks at aggregates for the entire economy, such as unemployment, GDP, and inflation. It analyzes economy-wide issues and performance. While microeconomics is static and assumes full employment, macroeconomics is dynamic and studies under employment situations.

Uploaded by

Haren Shylak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 7

Micro Vs Macro Economics

Definition of Micro Economics


• Microeconomics is the branch of economics that
concentrates on the behaviour and performance of
the individual units, i.e. consumers, family, industry,
firms.
• Here, the demand plays a key role in determining
the quantity and the price of a product along with the
price and quantity of related goods (complementary
goods) and substitute products, so as to make a
judicious decision regarding the allocation of scarce
resources, concerning their alternative uses.
• Examples: Individual Demand, Price of a product,
etc.
Definition of Macro Economics
• Macroeconomics is the branch of economics that
concentrates on the behaviour and performance of
aggregate variables and those issues which affect the
whole economy.
• It includes regional, national and international economies
and covers the major areas of the economy like
unemployment, poverty, general price level, GDP (Gross
Domestic Product), imports and exports, economic
growth, globalisation, monetary/ fiscal policy, etc.
• It helps in resolving the various problems of the economy,
thereby enabling it to function efficiently.
• Examples: Aggregate Demand, National Income, etc.
The Major Differences between Micro and
Macroeconomics
Micro Economics Macro Economics
• Micro’ means small. It is a • Macro’ means large. It is a
study of individuals or groups. study of economy as a whole.
•A study of particular • It deals with aggregate of
households, particular firms, these quantities. A study of
particular industries, particular the national income, the
commodities, particular prices general price level and the
etc. national output.
• The objective of • The objectives of
microeconomics is to macroeconomics are full
maximise utility or employment, price stability,
maximisation of profit or economic growth, favourable
minimisation of cost. balance of payments etc.
Micro Economics Macro Economics
• The basis of • The bases of
microeconomics is the price macroeconomics are the
mechanism which operates national income, output,
with the help of demand and employment and the general
supply forces. These forces price level which are
help to determine the determined by aggregate
equilibrium price in the demand and aggregate
market. supply.

• Microeconomics is based on • Macroeconomics uses the


the assumption of ‘ceteris technique of general
paribus’ (It means other equilibrium analysis that
things remaining constant) to studies aggregate economic
explain the various laws. variables and their
interrelations.
Micro Economics Macro Economics
• Microeconomics is a static • Macroeconomics is a
analysis . dynamic analysis.
• Microeconomics assumes • Macroeconomics assumes a
full employment, optimum situation of less than full
allocation of total employment. It studies under
resources and general employment. It takes general
price level as given. price level as variable and
assumes price of a particular
• Microeconomic problems product or factor as given.
are many. It possesses
• Macroeconomics seeks
maximum generality and practical understanding of an
applicability to a wide economy. So macroeconomic
range of situations. problems are relatively few and
so are their specific solutions.
Micro Economics Macro Economics
• Under micro study the main • Under macro study the
problem is of price main problem is income
determination. determination.
• Micro study is based on the • Macro study is based on the
objective of optimum objective of full
allocation of resources employment of total
resources.

You might also like