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Microeconomics
Micro comes from Greek word mikros,
meaning small. It study of behavior
of individual households, firms and
governments for choices they make,
Interaction in specific markets. It
focuses on individual parts of any
economy, rather than the whole.
Importance of
microeconomics
Product pricing
Factor pricing
Economic welfare
Optimum production
Allocation of resources
Macroeconomics
Macro comes from Greek word,
makros meaning large. It study of
the economy as a whole and a
focuses on big picture and ignores
fine details.
Importance of macro
economics
Micro
economics
Macro
economics
Difference in
the degree of
aggregation
It studies the
individual units
of the economy
like a firm, a
particular
commodity.
It deals with
aggregate like
national income
and aggregate
savings. It
studies the
problem of the
economy as a
whole.
Differences in
objectives
It is to study of
principles,
problems and
policies
concerning the
optimum
allocation of
It studies the
problems,
policies and
principles
relating full
employment of
resources and
Differences in
subject
matter
It deals with
the
determination
of price,
consumers
equilibrium,
distribution
and welfare
etc.
It is full
employment,
national
income,
general price
level, trade
cycle,
economic
growth etc.
Macro
economics
elements are
categorized into
aggregate units
like aggregate
demand,
aggregate
supply, total
consumption,
Different
assumption
It analysis
how
production
and factors of
production
are allocated
among
different
uses.
It analysis
how full
employment
can be
achieved.
Differences of
the forces of
equilibrium
It studies the
equilibrium
between the
forces of
individual
demand and
supply or
market demand
and supply.
It deals with
equilibrium
between the
forces demand
and supply of
whole economy.