Macroeconomics and Microeconomics

When you look at the world from a different perspective, it is full of people with desire to
obtain what they deemed necessary to fulfil their life, whether it is beyond what they actually
need. People are considered complex being, as they start to consume something, their needs are
eventually changing and elevating into something that the world can hardly provide. This
situation gave rise to the concept of economics, a social science concerned with the production,
distribution, and consumption of goods and services. Furthermore, it focuses on the action of
human beings, based on the assumptions that humans act with rational behaviour, seeking the
most optimal level of benefit. As economics studies how individuals, businesses, governments,
and nations make choices about how to allocate resources, it is subdivided into macroeconomics
and microeconomics.

While both macroeconomics and microeconomics are concerned with the allocation of
scare resources, they differ in scale. The former is wider in scope and it takes into consideration
the whole environment including the effects of the latter in a country or even globally.
Microeconomics in contrast, is more specific and it focuses on certain industry, entity or
individual. The microeconomics mainly deals with interaction between supplier and consumers
as they sell and buys goods in a circular pattern, and maintaining balance between the supply and
demand to manage scarcity. Scarcity occurs when there is shortage or inadequate supply of
goods. Supply and demand are inversely related, high supply depicts low demand and vice versa.
In addition, supply and price are inversely related while demand and price are directly related to
each other. These concepts are important as one of the major goals of microeconomics is to find
the best way to allocate limited resources among the different alternative uses through analysis of
the market and determining the price for goods and services. Macroeconomics is more
complicated as it is concerned on the overall point-of-view and studying the performance,
structure, behaviour and decision-making of an economy as a whole. It focuses on the long-term
stability by aiming to stabilize the prices of goods and services, increase employment rate and
sustain economic growth on national, regional and global level. One of the goals of
macroeconomics is to improve the standard of living and provide a better quality of life to the
participants of the economy.

As for the conclusion, macroeconomics and microeconomics have their own similarities
and differences that are essential to further comprehend the cycle of our economy. One has its
own importance that must not be left out for it can greatly affect the other one. Microeconomics
cannot stand alone to sustain the overall economy and macroeconomics will not be
comprehensive without the former. They should be studied together to analyse the overall impact
to ensure the sustainability of the economy.