Question

Discuss the difference between micro and macroeconomics citing the issues with which each is concerned

Answer 1

Microeconomics : Microeconomics is the study of parts of the economy or individual units of the economy. Microeconomics studies the behavior of a consumer or a producer or the individual prices of a product. It studies the theory of demand, production, cost, the theory of factor pricing, the theory of welfare and the price theory etc.

Macroeconomics : Macroeconomics is the study of the economy as a whole. It is also called Aggregate Economics or Income economic. Aggregate economic units like national income, aggregate demand,aggregate supply,general price,total employment etc.

Difference between the microeconomics and macroeconomics

Microeconomics can be compared to the study of trees while macroeconomics can be compared to the study of forest. Methodology of microeconomics is a partial equilibrium whereas the methodology of macroeconomics is general equilibrium. Microeconomics controls only a small portion of the economy while macroeconomics controls the wider segment of the economy. In microeconomics equilibrium is easily achieved as to macreconomics in which equilibrium cannot be easily achieved. Microeconomics focuses on individual demand and individual income while macroeconomics focuses on aggregate demand and national income. Microeconomics focuses on individual demand and supply. Macroeconomics focuses on price level etc.

Macroeconomics is conserned with issues relating to unemploment, inflation, deflation, trade and economic growth.

Microeconomics is conserned with issues relating to household issues and businesses.