Difference between Microeconomics and Macroeconomics

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The subject matter of economics is broadly divided into two branches, namely microeconomics and macroeconomics. Microeconomics and macroeconomics have become household worlds today. Microeconomic and macroeconomic analysis is now considered two important approaches to economic analysis.


The prefix ‘micro’ is originated from the Greek word ‘mikros’, meaning small. It is the study of the behavior of individual economic units such as households, companies, markets, etc. Microeconomics presumes the existence of full employment in the total economy. It analyzes economic phenomena under the assumption of ceteris paribus (other things remaining the same) and hence a method of partial equilibrium analysis. Microeconomics is applicable in a market economy where price plays a central role. Alternatively, microeconomics is also termed as price theory or value theory. Microeconomics aims to analyze the process by which scarce resources are allocated to alternative uses.


The prefix ‘macro’ is obtained from the Greek word ‘makros’, meaning large. Macroeconomics is thus the study of an entire economy. It studies very largely, economy-wide aggregate variables like national income, aggregate consumption, aggregate saving, total investment, etc. Macroeconomics more focuses on the performance, structure, and behavior of the economy.  It explores the measurement of the general price level and state of allocation of resources at the level of the economic system. In short, macroeconomics is the study of an entire economic system.

Difference between Microeconomics and Macroeconomics

The major difference between microeconomics and macroeconomics is shown with the help of the following table.

Unit of StudyThe economic conduct of separate or individual economic units is studied in microeconomics. Thus, it concerns how and what affects these decisions.It studies the entire economy rather than a part of the economy. Thus, macroeconomics is concerned with the behavior of the entire economy.   
Focus of StudyIt deals with the determination of prices and quantities in the individual market. It is concerned with the allocation of resources among individuals, firms, and industries.It deals with broad economic aggregates like national income, total employment, aggregate consumption, aggregate savings, general price level, etc.
Basic parameters of the subject matterPrice is the basic parameter of the subject matter of microeconomics.The basic parameter of the subject matter of macroeconomics is income.  
PerspectivesIt is the bottom-up view of the economy.Macroeconomic analysis is top-down view of the economy.
Methods of StudyIt uses partial equilibrium analysis techniques. In partial equilibrium analysis, it holds the assumption of ceteris paribus.It uses the procedure of quasi general equilibrium analysis. The mutual dependence of macroeconomic variables is the center stage of macroeconomics.
Nature of AssumptionsIt assumes total output, income, and employment, general price level, etc. are given.   It means economic variables of macroeconomics are given.It assumes allocation of resources, distribution of output, spending on various goods and services, relative prices, etc. are given. It means economic variables of microeconomics are given.  
ProblemsThe central problem of microeconomics is the price determination of individual commodities and factors of production.The central problem of macroeconomics is the determination of income, employment, and output of the country.
SuitabilityMicroeconomics is suitable to study the problems of individual economic units.Macroeconomics is suitable for the problems of the economy.
Difference between microeconomics and macroeconomics

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