| Basis for Differentiation |
Microeconomics |
Macroeconomics |
|
Meaning
|
Microeconomics studies the particular market segment of the economy |
Macroeconomics studies the whole economy, that covers several market segments |
| Deals with? |
Microeconomics deals with various issues like demand, supply, factor pricing, product pricing, economic welfare, production, consumption, etc., |
Macroeconomics deals with various issues like national income, distribution, employment, general price level, money, etc., |
| Business Application |
Applied to internal issues |
Environment and external issues |
| Scope |
Covers several issues like demand, supply, factor pricing, product pricing, economic welfare, production, consumption, etc. |
Covers several issues like distribution, national income, employment, money, general price level, etc., |
| Significance |
Useful in regulating the prices of a product alongside the prices of factors of production (labour, land, entrepreneur, capital, etc) within the economy |
Perpetuates firmness in the broad price level and solves the major issues of the economy like deflation, inflation, rising prices (reflation), unemployment and poverty as a whole |
| Limitations |
It is based on impractical presuppositions, i.e. In microeconomics, it is presumed that there is full employment in the community which is not at all feasible |
It has been scrutinized that Misconception of Composition’ incorporates, which sometimes fails to prove accurate because it is feasible that what is true for aggregate (comprehensive) may not be true for individuals too |
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Yogita Ingle 5 years, 10 months ago
Meaning
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