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What is Micro and Macro Economics

The term Micro derived from Greek word “Mikros” which means small.  It is concern with the study of individual decision units.

The term macro has been derived from Greek word “Makros” which means large.  It is that branch of economics analysis which studies the behavior of not one unit, but of all units combined.

Both can be distinguishing as follows: 

S.No.

Basis

Micro

Macro

1.

Study

Individual

Economy as a whole

2.

Deal With

Individual Units

Aggregate Units

3.

Tools

Demand & Supply of a Commodities

Aggregate Demand and Aggregate Supply of Economy as a whole

4.

Central Problem

Price Determination of Commodities or Factors of Production

Determine Level of Income & Employment

5.

Prices

Relative Prices Decide

Absolute Price Decide

6.

Type of Analysis

Particle Equi Analysis

General Equi Analysis

7.

Scope

Narrow

Wider

8.

Understanding

Easier

Complex


 

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