Question

Differentiate between micro and macro economics?​

Answer 1

Answer:

The difference between micro and macro economics is simple. Microeconomics is the study of economics at an individual, group or company level. Macroeconomics, on the other hand, is the study of a national economy as a whole. Microeconomics focuses on issues that affect individuals and companies.

Answer 2

Microeconomics basically analyzes the narrow or micro units,variables or components of the economy.

Macroeconomics essentially examines the broader and aggregate aspects or variables of the economy.

Explanation:

Key difference between Microeconomics and Macroeconomics:-

• Microeconomics basically evaluates the specific,micro or individual units or components of the economy such as individual markets,individual industry,individual firm/company,individual consumer behavior etc.Macroeconomics,on the other hand,deals with the macro,broader or aggregate components or variables of the economy such as GDP,National Income,aggregate consumption,aggregate expenditure,overall unemployment,inflation and so on.
• Microeconomics analyzes the demand side through utility maximization of individual rational consumers and supply side through profit maximization of individual firms/companies.Alternatively,Macroeconomics examines the aggregate demand by all the consumers and households for all the goods and services and aggregate supply by including all the goods and services produced by all the firms and companies in the economy.
• Microeconomics mainly focuses on the market price fluctuations which determines the demand and supply of any particular good or service in the market.Macroeconomics emphasizes on the determination of overall output level,National Income or GDP of the entire economy or nation through the interaction of aggregate demand and supply.
• Micro economic concepts and principles can be applied to implement government policies at individual consumer or firm/company level.Macroeconomic principles can be utilized to implement policies pertaining to the broader dimensions or variables of the economy such as inflation,unemployment,GDP growth and so on.