PRINCIPLES OF ECONOMIC
(DIFFERENCE BETWEEN MICROECONOMICS AND MACROECONOMICS)
CERTIFICATE IN ESTATE AGENCY (CEA)
HAFIFI BINTI HAMDAN
LECTURER: MRS. NORZIHA BINTI ISMAIL
DIFFERENCE BETWEEN MICROECONOMICS AND MACROECONOMICS
The study of economics is divided into microeconomics and macroeconomics by the modern economists. Both of them discuss the economic activities but are used in different sectors under different circumstances. In spite of having some similarities, they also have some differences which have been given below:
(a) Name Origination :
The word ‘micro’ comes from the Greek word ‘mikros’ which means ‘millions of parts’. And the word ‘macro’ is also from a Greek word ‘makros’ which means ‘large’.
(b) Definition :
Microeconomics –Study individual economic units such as households and firms.
Macroeconomics- deals with economy as a whole, It study the aggregate behaviour of the entire economy.
(c) Theory :
Microeconomics - price theory which is the combination of theory of demand and theory of production. Macroeconomics - called income theory that explains the result of total production and why the level rises and falls.
If we look at a simple supply and demand diagram for motor cars. Microeconomics is concerned with issues such as the impact of an increase in demand for cars.
This micro economic analysis shows that the increased demand leads to higher price, and higher quantity.
This looks at all goods and services produced in the economy.
The macro diagram is looking at Real GDP (which is the total amount of output produced in the economy) instead of quantity....
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