Se ha denunciado esta presentación.
Utilizamos tu perfil de LinkedIn y tus datos de actividad para personalizar los anuncios y mostrarte publicidad más relevante. Puedes cambiar tus preferencias de publicidad en cualquier momento.
Basis for
Comparison
Microeconomics Macroeconomics
Meaning
The branch of economics that studies
the behavior of an individ...
Microeconomics Macroeconomics
1. It is the study of individual economic units of
an economy
It is the study of economy as ...
Parameter Micro Economics Macro Economics
Economic Unit It is the study of individual
economic units of an economy
It is t...
Próxima SlideShare
Cargando en…5
×

Difference between Micro Economics and Macro Economics

31.066 visualizaciones

Publicado el

In this document file you get what you really want take a look

Publicado en: Educación
  • Sé el primero en comentar

Difference between Micro Economics and Macro Economics

  1. 1. Basis for Comparison Microeconomics Macroeconomics Meaning The branch of economics that studies the behavior of an individual consumer, firm, family is known as Microeconomics. The branch of economics that studies the behavior of the whole economy, (both national and international) is known as Macroeconomics. Scope Covers various issues like demand, supply, product pricing, factor pricing, production, consumption, economic welfare, etc. Covers various issues like, national income, general price level, distribution, employment, money etc. Importance Helpful in determining the prices of a product along with the prices of factors of production (land, labor, capital, entrepreneur etc.) within the economy. Maintains stability in the general price level and resolves the major problems of the economy like inflation, deflation, reflation, unemployment and poverty as a whole. Limitations It is based on unrealistic assumptions, i.e. In microeconomics it is assumed that there is a full employment in the society which is not at all possible. It has been analyzed that 'Fallacy of Composition' involves, which sometimes doesn't proves true because it is possible that what is true for aggregate may not be true for individuals too. Key Differences between Micro and Macro Economics 1. Microeconomics studies the particular market segment of the economy, whereas Macroeconomics studies the whole economy, that covers several market segments. 2. Microeconomics deals with an individual product, firm, household, industry, wages, prices, etc., while Macroeconomics deals with aggregates like national income, national output, price level etc. 3. Microeconomics covers issues like how the price of a particular commodity will affect its quantity demanded and quantity supplied and vice versa, while Macroeconomics covers major issues of an economy like unemployment, monetary/ fiscal policies, poverty, international trade etc. 4. Microeconomics determine the price of a particular commodity along with the prices of complementary and the substitute goods, whereas the Macroeconomics is helpful in maintaining the general price level. 5. While analyzing any economy, microeconomics takes a bottom-up approach, whereas the macroeconomics takes a top-down approach into the consideration.
  2. 2. Microeconomics Macroeconomics 1. It is the study of individual economic units of an economy It is the study of economy as a whole and its aggregates. 2. It deals with individual income, individual prices and individual output, etc. It deals with aggregates like national income, general price level and national output, etc. 3. Its Central problem is price determination and allocation of resources. Its central problem is determination of level of income and employment. 4. Its main tools are demand and suply of a particular commodity/factor. Its main tools are aggregate demand and aggregate supply of economy as a whole. 5. It helps to solve the central problem of what, how and for whom to produce in the economy It helps to solve the central problem of full employment of resources in the economy. 6. It discusses how equilibrium of a consumer, a producer or an industry is attained. It is concerned with the determination of equilibrium level of incoem and employment of the economy. 7. Price is the main determinant of microeconomic problems. Price is the main determinant of microeconomic problems. 8. Examples are: individual income, individual savings, price determination of a commodity, individual firm's output, consumer's equilibrium. Examples are: National income, national savings, general price level, aggregate demand, aggregate supply, poverty, unemployment etc.
  3. 3. Parameter Micro Economics Macro Economics Economic Unit It is the study of individual economic units of an economy It is the study of economy as a whole and its aggregates. Scope It deals with individual income, individual prices and individual output, etc. It deals with aggregates like national income, general price level and national output, etc. Central Problem Its Central problem is price determination and allocation of resources Its central problem is determination of level of income and employment. Main Tools Its main tools are demand and suply of a particular commodity/factor. Its main tools are aggregate demand and aggregate supply of economy as a whole. Use It helps to solve the central problem of what, how and for whom to produce in the economy It helps to solve the central problem of full employment of resources in the economy. Equilibrium Analysis It discusses how equilibrium of a consumer, a producer or an industry is attained. It is concerned with the determination of equilibrium level of income and employment of the economy Determinants Price is the main determinant of microeconomic problems Price is the main determinant of microeconomic problems Limitation It is based on unrealistic assumptions, i.e. In microeconomics it is assumed that there is a full employment in the society which is not at all possible. It has been analyzed that 'Fallacy of Composition' involves, which sometimes doesn't proves true because it is possible that what is true for aggregate may not be true for individuals too. Approach While analyzing any economy, microeconomics takes a bottom-up approach, The macroeconomics takes a top-down approach into the consideration. Examples Examples are: individual income, individual savings, price determination of a commodity, individual firm's output, consumer's equilibrium Examples are: National income, national savings, general price level, aggregate demand, aggregate supply, poverty, unemployment etc.

×