Difference between microeconomics and macroeconomics

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Dear student,

Points of Difference Microeconomics Macroeconomics

1. Study matters It studies about individual
economic units like households, firms, consumers, etc. It studies about an economy as a whole.

2. Deals with It deals with how consumers or producers make their decisions depending on their given budget and other variables. It deals with how different economic sectors such as households, industries, government and foreign
sector make their decisions.

3. Method It uses the method of partial equilibrium, i.e. equilibrium in one market. It uses the method of general equilibrium, i.e. equilibrium in all markets of an economy
as a whole.

4. Variables The major microeconomic variables are price, individual consumer’s demand, wages, rent, profit, revenues, etc. The major macroeconomic variables are aggregate price, aggregate demand, aggregate supply, inflation,
unemployment, etc.

5. Theories Various theories studied are:

Theory of Consumer’s Behaviour and Demand

Theory of Producer’s Behaviour and Supply

Theory of Price Determination under different market conditions

Various theories studied are:

Theory of National Income

Theory of Money

Theory of General Price Level

Theory of Employment

Theory of International Trade

6. Popularised by Alfred Marshall Keynes

Regards

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