Difference Between Microeconomics and Macroeconomics

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EconomicsNotes | Commerce
Difference between Microeconomics and Macroeconomics
Unit: Nature of Economics
For: Management Class 11

Micro and macro economics, both are the branches of economics. On the one thing, micro economics deals with individual facts, that is branches, flowers, leaf, etc. and on the other hand macro economics deals with aggregate facts that is whole tree. Both play an important role in formulation of economic principles.

Micro economicsMacro economics
1. Micro is derived from Greek word ‘micros’ which means small.1. Macro is derived from Greek word ‘macros’ which means large.
2. It is a study of individual economic variables like firm, industries, consumers, etc.2. It is a study of aggregate economic variable like total consumption, saving, etc.
3. It is based on partial equilibrium analysis, other things remaining the same.3. It is based on general equilibrium analysis.
4. Laws and principles are based on assumptions.4. Laws and principles are far from assumptions.
5. Evolution of micro economics took place earlier than macro economics.5. It evolved only after the publication of Keynesian’s book, ‘The theory of Employment, Interest, and Money’.
6. Market equilibrium is determined by individual market demand and supply.6. Market equilibrium is determined by aggregate market demand and supply.
7. It is suitable to study the problems of individual economic unit.7. It is suitable to study the problem of economy as a whole like: level of employment, income etc.
8. It is static economic analysis.8. It is dynamic economic analysis.
9. It is called price theory or value theory.9. It is also called theory of income and employment or Keynesian’s theory.
10. It has very narrow scope that is an individual market, etc.10. It has very wide scope that is a country.

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