Microeconomics and Macroeconomics

 

Microeconomics:

Microeconomics is the branch of economics that studies individual parts of the economy. It focuses on small units like

• A person (consumer)

• A business (firm)

• A market (such as the market for milk or mobile phones)

Main Topics in Microeconomics:

• Demand and Supply—How Prices Are Set

• Consumer behavior—why people buy things

• Production and cost—how businesses produce goods

• Market structures—types of competition (like monopoly, perfect competition, etc.)

• Profit and loss—how firms make decisions

Example:

If we study how the price of apples is decided in the market, or why a company increases the price of its product, that is microeconomics.

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Macroeconomics:

Macroeconomics is the branch of economics that looks at the whole economy. It studies big things that affect the country or world as a whole.

Main Topics in Macroeconomics:

• National income (GDP)—the total income of a country

• Inflation—rise in prices

• Unemployment—people without jobs

• Economic growth—how fast the economy is growing

• Government policies—like taxes, spending, or printing money

Example:

If we study why there is inflation in the country, or why unemployment is increasing, or how the government controls the economy, that is macroeconomics.

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Difference between Micro- and Macroeconomics:

Microeconomics	Macroeconomics
Studies individuals and firms	Studies the whole economy
Focuses on specific markets	Focuses on national and global issues
Example: Price of one product	Example: Country’s inflation rate
Bottom-up approach	Top-down approach

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In Simple Words:

• Microeconomics = Small Picture (individuals, firms, markets)

• Macroeconomics = Big Picture (countries, economy as a whole)