What is the difference between microeconomics and macroeconomics?

Before we distinguish micro economics with macroeconomics, it is very important for us to understand the meaning of terms economics, micro and macro.

Economics – It is a social science, which is concerned with the production, distribution and consumption of goods and services. It is a study of allocation of scarce resources by individuals, businesses, governments and countries to satisfy their needs.


•Micro – It means very small.


•Macro – It means large


Microeconomics is that branch of economics which deals with the behavior of individual economic unit like a consumer or single commodity etc.


Macroeconomics is that branch of economics which deals with behavior of economy as a whole like national income, aggregate consumption, etc


The basic point of difference between these two branches of economics are explained below –


Points of Difference



Micro Economics



Macro Economics



1. Meaning



It is the study of individual economic units



It is the study of the economy as a whole



2. Deals with



Individual economic variables like individual demand, etc



Whole or total economic variables like aggregate demand, etc



3. Objectives



Allocation of resources and price determination



Determination of national income and employment of resources



4. Business Application



Applied to operational or internal issues



Applied to external and environmental issues



5. Importance



It is helpful in determining the prices of a product along with the prices of factors of production.



It maintains stability in the general price level and resolves the major problems of economy like inflation, deflation, unemployment, etc



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