Published by: Zaya
Published date: 15 Jun 2021
Differences between microeconomics and macroeconomics:
Microeconomics deals with the small components of the economy or the individual. It studies the behavior of individual units and it may be a person, a household, or a particular firm. So microeconomics is referred to as the microscopic study of the economy.
Macroeconomics deals with the aggregate economic variables such as national income, aggregate expenditure, total savings and investment, general price level, etc. Macroeconomics can be defined as a branch of economic analysis that studies the behavior of not one particular economic unit but of all units combined together.
The difference between microeconomics and macroeconomics is given below:-
| Microeconomics | Macroeconomics |
| 1. The economics that deals with individual economic issues are called microeconomics. | 1. The economics that deals with aggregate economic issues is called macroeconomics. |
| 2. It is derived from the Greek word ‘Mikros’ which means small. | 2. It is derived from the Greek word ‘Makros’ which means large. |
| 3. It is also called price theory. | 3. It is also called income theory. |
| 4. Its subject matter is best on the individual units of an economy like a producer, a consumer, etc. | 4. Its subject matter is based on aggregate issues of an economy like aggregate demand, poverty, etc. |
| 5. Market equilibrium in microeconomics is determined by market demand and supply. | 5. Macroeconomic equilibrium in macroeconomics is determined by aggregate demand and supply. |
| 6. Utility maximization for consumer and profit maximization for producers is its major objectives. | 6. Economic growth, price stability, maintaining favorable BOP, reducing unemployment, etc, are the major objectives. |
| 7. Laws and principles are based on assumptions. | 7. Laws and principles are far from assumptions. |