Micro economics Macro economics

1. Micro is derived from Greek word micros 1. Macro is derived from Greek word macros which
which means small. means large.
2. It is a study of individual economic variables 2. It is a study of aggregate economic variable like
like firm, industries, consumers, etc. total consumption, saving, etc.
3. It is based on partial equilibrium analysis, other
3. It is based on general equilibrium analysis.
things remaining the same.
4. Laws and principles are based on assumptions. 4. Laws and principles are far from assumptions.
5. It evolved only after the publication of
5. Evolution of micro economics took place earlier
Keynesians book, The theory of Employment,
than macro economics.
Interest, and Money.
6. Market equilibrium is determined by individual 6. Market equilibrium is determined by aggregate
market demand and supply. market demand and supply.
7. It is suitable to study the problems of individual 7. It is suitable to study the problem of economy as a
economic unit. whole like: level of employment, income etc.
8. It is static economic analysis. 8. It is dynamic economic analysis.
9. It is also called theory of income and employment
9. It is called price theory or value theory.
or Keynesians theory.
10. It has very narrow scope that is an individual
10. It has very wide scope that is a country.
market, etc.