Question

The basic difference between macroeconomics and microeconomics is:

Answer 1

Microeconomics is concerned with individual markets and the behaviour of people and firms while Macroeconomics is concerned with aggregate markets and the entire economy.

The primary difference between Micro and Macro economics is that Microeconomics focuses on issues regarding individual income, output, price of goods, etc. whereas Macroeconomics deals with issues like employment rate, national household income etc.

Microeconomics studies the behaviour of individual households and firms in making decisions on the allocation of limited resources. Micro economics focuses on supply and demand and other forces that determine price levels, making it a bottom up approach. Macroeconomics takes a top down approach and is generally focused on countrywide or global economics. It studies involves the sum total of economic activity, dealing with the issues such as growth, inflation and unemployment.

Investors can use Microeconomics in their investment decisions while Macroeconomics is an analytical tool mainly used to craft economic and fiscal policy.

There are few more differences between Micro and Macro economics. They are :

Microeconomics	Macroeconomics
It studies individual economic units .	It studies a nation's economy, as well as its various aggregates.
It primarily deals with individual income, output, price of goods etc.	It is the study of aggregates such as national output, income, as well as general price levels.
It focuses on overcoming issues concerning the allocation of resources and price discrimination.	It focuses on upholding issues like employment and national household income.
It accounts for factors like demand and supply of a particular commodity.	It accounts for the aggregated demand and supply of a nation's economy.
It offers a picture of the goods and services that are required for an efficient economy. It also shows the goods and services that might grow in demand in future.	It helps ensure optimum utilisation of the resources available to a country.
It helps point how equilibrium can be achieved at a small scale .	It helps determine the equilibrium levels of employment and income of the nation.
It also focuses on issues arising due to price variation and income levels.	The primary component of macroeconomic problems is income.