Micro and Macro Economics

Micro and Macro Economics-

Micro and Macro Economics-Microeconomics is the studies of the behavior of small and individual economic units of an economy, while Macroeconomics is that part of economic theory that studies the behavior of aggregates of the economy as a whole.

What is Economics?

Economics is a social science ( behavior of people living in society) that studies of how society uses its limited (scarce) resources, which have alternative uses, to produce goods and services and to distribute them among different groups of people. Economics is divided into two different categories:

1-Microeconomics

2-Macroeconomics

Micro and Macro Economics

  1.Microeconomics-

*Micro’ word is derived from the greek word ‘Mikros’ means small.

* Micro Economics is the studies of the behavior of small and individual economic units of an economy. Like a particular consumer, Production of a firm, Individual income or a small group of indiuidual units.

* Microeconomics  that studies behaviour of a particular unit.

Examples  of Microeconomics are :

Demand of an individual consumer,   Production of a firm,   Individual income ,   Pricing of goods,  Individual savings,  Pricing of factor services, etc.

Definitions of Microeconomics-

According to Shapiro, “Microeconomics deals with small parts of the economy.

 According to Boulding, “Microeconomics is the study of particular firm, particular household, individual price, wage, income, industry and particular commodity.”

According to Watson,  “Microeconomics is the theory of the small, of the behaviour of the consumers, producers and markets.’

Microeconomics is a branch of economics that studies the behavior of individuals, households, and firms in making decisions regarding the allocation of resources. It is concerned with the analysis of the economic behavior of individual units such as consumers, producers, and resource owners. 

Key Points of Microeconomics-

1. It is the study of individual economic units of an economy.
2. It deals with Individual Demand, Individual Income, Individual prices, Individual output, etc.
3. Its main aims are the price determination of a commodity and the allocation of resources.
4. Its main tools are the demand and supply of a particular commodity/factor.
5. It helps to solve the central problem of ‘what, how and for whom’ to produce. In the economy
6. It is also known as `Price Theory.’

Also read : Law Of Supply

Also read : Business Environment: Meaning, Features and Importance

2.Macroeconomics-

* Macro’ word is derived from the Greek word ‘Makros’ means Large, so macroeconomics deals with overall performance of the economy.

* Macroeconomics is that part of economic theory which studies the behavior of aggregates of the economy as a whole.

* Macroeconomics is the branch of economics that studies the behavior and performance of the economy as a whole.

* Macroeconomics  that studies behaviour of not a particular unit, but all unit combined together.

Examples Macroeconomics are:

National Income,   National savings,   General price level,   Aggregate demand,   Aggregate supply,   Poverty,

Unemployment, etc.

Definitions of Microeconomics-

According to Boulding, “Macroeconomics theory is that part of economics which studies the overall averages and aggregates of the system.”

According to Shapiro, “Macroeconomics deals with the functioning of the economy as a whole.”

Key Points of Macroeconomics-

1. It is the study of economy as a whole and its aggregates.
2. It deals with aggregates like national Income, general price level, national output, etc.
3. Its  main aims to determine Income and employment level of the economy.
4. Its main tools are aggregate demand and aggregate supply.
5. It is also known as ‘Income and Employment Theory’.
6. It describes how the economy as a whole functions and how the level of national income and employment is determined on the basis of aggregate demand and aggregate supply.
7. Helpful in the study of economic problems – such as how to control price fluctuations ; how to overcome the problem of unemployment; how to augment (increase)  the level of national income and output and how to plan for the rapid development of the economy.

Difference between Micro and Macro Economics

Or

Micro Vs Macro Economics

Basis	Microeconomics	Macroeconomics
Derived From	Microeconomics is derived from a Greek work Mikros which means small.	Macroeconomics is derived from a Greek word Makros which means Large.
Meaning	Microeconomics is the study of individual economic units .	Macroeconomics is the study of economy as a whole.
Aim	Its main aims to price determination of a commodity and allocation of resources.	Its main aims to determine Income and employment level of the economy.
Main Tools	Its main tools are demand and supply of a particular commodity/factor.	Its main tools are aggregate demand and aggregate supply.
Other name	It is also known as `Price Theory.’	It is also known as ‘Income and Employment Theory’.
Example	Demand of an individual consumer,  Production of a firm,   Individual income ,   Pricing of goods,  Individual savings,  Pricing of factor services, etc.	National Income,   National savings,   General price level,   Aggregate demand,   Aggregate supply,   Poverty, Unemployment, etc.