Difference between Micro and Macro Economics. Economics: Economics is divided into two categories one is macroeconomics and another is microeconomics. Macroeconomics studies aggregate output, employment, and the general price level. Microeconomics studies the economic behavior of individual decision-makers like resource owners, consumers, and business firms.
Page Contents
Here, Conceptual differences mentioning in below –
Micro means the millionth part. When we talk about microeconomics, we mean some small part of the whole economy.
For example, if we study individual economic agents such as a consumer or firm, it is a micro approach.
If it is an analysis of price, it is of a commodity or factor of production, not the general price level. In the case of demand analysis, it is a demand for a particular commodity or service of a firm/industry, not aggregate demand for the whole economy.
Thus, microeconomics deals with the behavior of individual decision-making units. Full employment is one of the important features of microeconomics is, that is why the economic problem in the micro approach lies in resource allocation or in price determination.
Therefore, it is called the “Price theory”. Concept of Micro and Macro Economics.
Macroeconomics is concerned with the aggregates and average of entire economies such as national income, aggregate demand, and supply, full employment, aggregate consumption, saving, investment, general price, and inflation. In it, we study how these aggregates and averages are determined and what causes fluctuations in them. It also deals with how an economy grows and develops.
The macro approach is not a mere aggregation of the micro approach. It is quite different and far more complicated than summation and multiplication. For example, let us consider the case of saving. In times of depression, saving by an individual is beneficial, while saving by the economy will definitely deepen the depression further.
Concept of Micro and Macro Economics