The following are the differences
between Micro and Macro Economics.
1. Scope: Micro –Economics is concerned with study of
Individual economic units such as a firm, a consumer etc.
Macro –Economics deals with large
segments of the economy such as aggregate demand, general price level, national
income etc.
2. Method of study:
Micro- Economics studies the individual parts of the economy intensively
(slicing Method). Ex. Behaviour of a consumer.
Macro-Economics lumps up the
individual units together into big lumps for the purpose of brief study.
Ex. The study of national income.
3. Different
economic agents: In micro-economics, each individual
economic agent thinks about its own interest and welfare. For example,
Producers try to get maximum profit at minimum cost of production with the
higher selling prices.
In Macro – economics, economic
agents are different from the individual economic agents and their aim is to
get maximum welfare of the country. For example, the Government of India,
one of the macro -economic decision maker in India has a goal to achieve
economic welfare of India.
4. Equilibrium Analysis:
Micro-Economics studies the partial equilibrium in the economy, such as
consumer equilibrium, producer equilibrium etc.
Macro – economics studies the
general equilibrium in the economy, such as equilibrium in the general price
level etc.
5. Domain: Micro-economics comprises the theories such as theory
of consumer’s behavior, the theory of production and cost, the theory of rent,
wages, interest and Profits.
Macro-economics includes the
theories like the theory of income, output and employment, consumption
function, inflation etc.
6. View: Micro economics explains the different economic
variables at micro level. It is a detailed study giving Microscopic view.
Macro economics is a brief study of
an economy as a whole. So its study is defined as Birds eye view.
In spite of
various differences, both Micro and Macro economics are interdependent and
complementary to each other.
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