Difference between Microeconomics and Macroeconomics

Microeconomics is a branch of economics studying the behaviour of an individual economic unit. Adam Smith is known as the father of economics and microeconomics. Microeconomics help in contemplating the attributes of different decision-makers in an economy like individuals, enterprises, and households. In simple terms, microeconomics help in understanding why and how different goods have different values, how individuals make certain decisions, and how they cooperate with each other. For example, individual output, individual income, etc. The main tools of Microeconomics are Demand and Supply.

Macroeconomics is a part of economics that focuses on how a general economy, the market, or different systems that operate on a large scale, behaves. Macroeconomics concentrates on phenomena like inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment. For example, aggregate output, national income, aggregate consumption, etc. The main tools of Macroeconomics are Aggregate Demand and Aggregate Supply.

Difference between Microeconomics and Macroeconomics

Basis	Microeconomics	Macroeconomics
Meaning	Microeconomics is a branch of economics studying the behaviour of an individual economic unit.	Macroeconomics is a part of economics that focuses on how a general economy, the market, or different systems that operate on a large scale, behaves.
Tools	Demand and Supply are the two tools of Microeconomics.	Aggregate Demand and Aggregate Supply are the two tools of Macroeconomics.
Basic Assumptions	The basic assumption of microeconomics is that all the macro variables are constant. The macro variables include income, savings, consumption, etc.	The basic assumption of macroeconomics is that all the micro variables are constant. The micro variables include decisions of firms and households, prices of individual products, etc.
Basic Objective	The basic aim of microeconomics is determination of the price of a commodity or factors of production.	The basic aim of macroeconomics is determination of the income and employment level of the economy.
Degree of Aggregation	Microeconomics involves a limited aggregation degree. For example, market demand is derived by the aggregation of individual demands of all the buyers in a particular market.	Macroeconomics involves the highest aggregation degree. For example, aggregate demand is derived for the entire economy.
Other Name	As microeconomics is primarily concerned with price determination of commodities and factors of production, it is also known as Price Theory.	As macroeconomics is primarily concerned with determining income level and employment, it is also known as Income and Employment Theory.
Example	Individual Output, Individual Income, etc.	National Output, National Income, etc.

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