Microeconomics And Macroeconomics

What is Microeconomics?

Microeconomics is a part of economics that contemplate the traits of decision makers within the economy, such as households, individuals and enterprises. The term firm is usually used to refer to all sorts of trade.

Examples : Individual Demand, Price of a product.

What is Macroeconomics?

Macroeconomics is a branch of economics that depicts a substantial picture. It scrutinizes itself with the economy at a massive scale, several issues of an economy are considered. The issues confronted by an economy and the headway that it makes are measured and apprehended as a part and parcel of Macroeconomics.

Examples : Aggregate Demand, National Income.

Difference between Microeconomics and Macroeconomics

Basis for Differentiation

Microeconomics

Macroeconomics

Meaning

Microeconomics studies the particular market segment of the economy

Macroeconomics studies the whole economy, that covers several market segments

Deals with?

Microeconomics deals with various issues like demand, supply, factor pricing, product pricing, economic welfare, production, consumption etc.,

Macroeconomics deals with various issues like, national income, distribution, employment, general price level, money etc.,

Business Application

Applied to internal issues

Environment and external issues

Scope

Covers several issues like demand, supply, factor pricing, product pricing, economic welfare, production, consumption etc.

Covers several issues like,  distribution, national income,, employment, money, general price level etc.,

Significance

Useful in regulating the prices of a product alongside the prices of factors of production (labor, land, entrepreneur, capital etc) within the economy

Perpetuates firmness in the broad price level and solves the major issues of the economy like deflation, inflation, rising prices (reflation), unemployment and poverty as a whole

Limitations

It is based on impractical presuppositions, i.e. In microeconomics it is presumed that there is a full employment in the community which is not at all feasible

It has been scrutinized that Misconception of Composition’ incorporates, which sometimes fails to prove accurate because it is feasible that what is true for aggregate (comprehensive) may not be true for individuals too

After learning the above concepts, we can come to a conclusion that these 2 concepts are not antithetical but complementary to each other and they are bound go hand in hand. To know more about Commerce concepts, stay tuned to BYJU’S.