Difference between Microeconomics and Macroeconomics

Difference between Microeconomics and Macroeconomics

Difference Between Microeconomics and Macroeconomics 

The difference between microeconomics and macroeconomics are as follows:

Basis                                                                            Microeconomics Macroeconomics

Microeconomics is originated from Greek word’MIKROS’ which means small.

Macroeconomics is originated from Greek word ‘MAKROS’ which means large.
Definition Microeconomics is the study of how individual households and firms make decisions and how they interact in markets. Macroeconomics is the study of economywide phenomena,including inflation ,unemployment and economic growth.
Theory Microeconomics is known as Price Theory. Macroeconomics is known as Income theory.(Policy Science).
Objective Microeconomics studies principles,problems and policies concerning the optimum allocation of resources with maximim satisfaction . Macroeconomics studiesthe problems,policies and principles,BOP connection,poverty reduction,etc  relating to full employment and growth of resources.
Price Microeconomics studies relative price ie; price of a particular commodity. Macroecomics studies general price ie; average price of goods and services available.
Equilibrium Microeconomics studies partial equilibrium analysis.It studies equilibrium at a particular point of time.It doesn’t consider other factor.So,regarded as a static analysis. Macroeconomicsstudies general equilibrium analysis ie; all variables changes with time.So,it is regarded as dynamic analysis.
Employment Microeconomics provides full employment equilibrium. Macroeconomics provides under employment equilibrium .
Limitation Microeconomics fails to take into account of aggregates. Macroeconomics fail to take into account of individuals.
Subject matter The subject matter of microeconomics deals with the determination of price,consumer’s equilibrium,distribution and welfare,etc. The subject matter of macroeconomics studies full employment .price level ,national income ,trade cycles,etc.
Methodology Laws of microeconomics are formulated on assumptions. Laws of macroeconomics are far from assumptions.
Scope Microeconomics has very narrow scope that is an individual market. Macroeconomics has very wide scope that is a whole nation.
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