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Difference Between Microeconomics and Macroeconomics


Price determination, Consumers equilibrium, distribution and welfare are the subject-matter of microeconomics. Full employment, national income, general price level, trade cycles and growth are subject-matter of macroeconomics.


The purpose is to study principles. problems and policies relating to allocation of resources. Macroeconomics studies problems, policies and principles about full employment of resources and growth of resources.


Microeconomics deals with individual units of the economy like firm. Macroeconomics deals with aggregates like national income and aggregate savings.

Method of Study:

Method of study is called partial equilibrium analysis in microeconomics. Method of study is called general equilibrium analysis in macroeconomics.


Full employment constant production and income are assumptions of microeconomics. Suggestions are made for allocation of factors of production among various uses. Factor of production distribution is an assumption of macroeconomics. Suggestions are made how to achieve full employment.

Mortal Subject:

A tool of study, in microeconomics, is individual who dies after some time because man is mortal. A tool of study, in macroeconomics, is society who never dies. Society is immortal.

Equilibrium Forces:

Microeconomics studies the equilibrium between forces of market demand and supply. Macroeconomics deals with equilibrium between forces of aggregate demand and aggregate supply So aggregate demand and aggregate supply is concerned with total income.

Wrong Application:

An act that is useful for an individual may upset the working of the economy as a whole. A virtue for individuals may become vices for the economy. Thus, micro decisions do not hold true for the economy. Saving for an individual family is beneficial but saving for whole economy reduces consumption that leads to lower demand lower supply and lower Income.


The above explanation reveals that microeconomics deals with different parts of an economy separately, whereas macroeconomics focuses the economy as a whole. This brings us to the conclusion that there are always micro as well as macro economic problems in a country. For example, there may be a problem of inefficiency in production and wastage of resources in consumption on micro footing.

Similarly, there are problems of inflation and unemployment on macro level. To solve these economic problems a country needs both micro and macro economic policies. Therefore, there is always a need to integrate the study of micro and macro Economics.


Munir Ahmed Bhutta. Economics, Azeem Academy Publishers, Lahore.

Abdul Haleem Khawja. Economics, Khawja and Khawja Publishing House, Islamabad.

Manzoor Tahir Ch. Principles of Economics, Azeem Academy Publishers, Lahore.

Muhammad Irshad. Economics, Naveed Publications, Lahore.

K K Dewett & M H Navalur. Modern Economic Theory (Theory and Policy), S. Chand Publishing.


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