Distinguish between the following.
Micro Economics and Macro Economics.
|Points||Micro Economics||Macro Economics|
|1. Meaning||Micro economics deals with the economic behaviour of various economic units in the economy, such as particular firms, particular households, prices of individual products, wages in particular industry, etc.||Macro economics is concerned with the economic behaviour of aggregates in the economy, such as general price level, total production output, national income, etc.|
|2. Allocation of resources||Micro economics is concerned with the allocation of resources for the production of particular goods.||Macroeconomics deals with allocation of resources in the economy as a whole.|
|3. Approach||Micro economics analysis is based on partial equilibrium analysis. It considers other things constant.||Macroeconomics analysis is based on General equilibrium analysis. In Macroeconomics, everything depends on every things else.|
|4. Issue of Aggregation||Microeconomics deals with aggregates of a particular industry (such as cement industry or textile industry) with regard to output, demand, price, employment, etc., by taking into consideration the aggregation of various firms belonging to that industry.||Macroeconomics is concerned with aggregation that relates to the whole economy and not of a particular industry. For instance, Macroeconomics analysis can be done in respect of total employment by considering the aggregation of all the sectors of the economy.|
|5. Economic variables||Microeconomics deals with the behaviour of micro variables such as individual demand, wages in a particular industry, prices of a particular products, etc.||Macroeconomics is concerned with the behaviour of macro variables such a general price level, employment in the country, national income total savings and investments.|
|6. Method of Study||Microeconomics studies each unit in detail by using slicing method.||Macroeconomics studies the economy as a whole by using lumping method.|
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