Question

Distinguish between :
Micro Theory of Distribution and Macro Theory of Distribution

Answer 1

The micro theory of distribution explains how the rates of rewards for various factors of production ( land, labour, capital and entrepreneur) are determined. It deals with the determination of relative prices of factors of production.

The macro theory of distribution deals with the determination of the aggregate rewards of various factors such as national income or employment. It studies the interrelationship of all the macroeconomic variables.