THE MAJOR DIFFERENCE BETWEEN MICRO AND MACRO ECONOMICS
The difference between micro and macroeconomics can be made on the following counts:-
MICRO-ECONOMIC
The word micro has been derived from the Greek word which means small.
Microeconomics is the study of economy action of individual and the small group of individuals.
particular household, particular firms, particular industry, particular commodities and individuals prices.
The objective of microeconomics on demand side is to maximize utility where on the supply side is to minimise profit at minimum cost.
The microeconomics is the price mechanism which operate with the help of demand and supply forces. These force is help the to determine the equilibrium price in the market.
Microeconomics is based on different assumptions concerned with rational behaviour of individuals. moreover the faces ceteris paribus is used to explain the economics law.
Microeconomics is based on partial equilibrium analysis which helps to explain the equilibrium condition of an individual, a firm, an industy and a factor.
In microeconomics, the study of equilibrium conditions are analysed at a particular period. but it does not explain the time element.
MACRO-ECONOMICS
Macro economics is also derived from the greek word Makros which mean large.
It deal with aggregate of these quantities not with individual income but with the national income, not with individuals price but with the price level, not with individual output bird with the national output.
The mean objectives of micro economics are full employment price stability economic growth and favourable balance of payments
Macroeconomics is national income, output and Employment ,which are determined by aggregate demand and aggregate supply.
Macroeconomics base on its assumption on such variable as the aggregate volume of output of an economy, with the extend to which its resources and are employed, with the size of national income and with the general price level.
Macroeconomics is based on general equilibrium analysis which is an extensive study of a number of economic variables, their inter relations and interdependence for under standing the working of the economic system as a whole.
Macroeconomics is based on time-legs, rate of change, and past and expected value of the variables.
