Difference between Microeconomics and Macroeconomics:
Microeconomics
1) It is
that branch of economics which deals with the economic decision-making of
individual economic agents such as the producer, the consumer, etc; 2) It takes
into account small components of the whole economy. 3) It deals with the
price-determination in case of individual products and factors of production. 4)
It is known as price theory (since it explains the process of allocation of
economic resources along alternative; 5) It is concerned with the optimisation
goals of individual consumers and producers (e.g., individual consumers are
utility-maximisers, while individual producers are profit-maximisers). 6) It
studies the flow of economic resources or factors of production from any
individual owner of such resources to any individual user of these resources,
etc. 7) Microeconomic theories help us in formulating appropriate policies for
resource allocation at the firm level. 8) It takes into account the aggregates
over homogeneous or similar products (e.g., the supply of steel in an economy).
Macroeconomics
1) It is
that branch of economics which deals with aggregates and averages of the entire
economy, e.g., aggregate output, national income, aggregate savings and
investment, etc. 2) It takes into consideration the economy of any country as a
whole. 3) It deals with general price-level in any economy. (lines of
production on the basis of relative prices of various goods and services). 4)
It is also known as the income theory (since it explains the changing levels of
national income in any economy during any particular time period). 5) It is
concerned with the optimisation of the growth process of the entire economy. 6)
It studies the circular flow of income and expenditure between different
sectors of the economy (say, between the firm sector and household sector). 7)
Macroeconomic theories help us in formulating appropriate policies for
controlling inflation (i.e., rising price-level), unemployment, etc. 8) It
takes into account the aggregates over heterogeneous or dissimilar products
(say, the Gross Domestic Product of any country during any year.