Microeconomics & Macroeconomics
Some Of The Differences Between Micro- & Macroeconomics
Microeconomics |
Macroeconomics |
Single market e.g. milk |
Entire economy e.g. Singapore |
Price of a good/service |
Average price levels in an economy (inflation/deflation) |
Individual/market demand |
Total demand in an economy |
Individual firm/market supply |
Total supply in an economy |
Government intervention in a market e.g. cigarettes |
Government intervention in the economy e.g income tax |
Reasons for differences in workers wages |
Unemployment & minimum wages |
- Microeconomics is the study of individual markets & sections of the economy, rather than the economy as a whole
- It examines the different choices individuals, households & firms
- It examines what factors influence their choices
- It examines how their decisions affect the price, demand & supply of goods/services in a market
- It examines how Governments influence consumption & production
- Macroeconomics is the study of economic behaviour & decision making in the entire economy, rather than just an individual market
- It examines the role of the government in achieving economic growth & human development through the implementation of specific government policies (fiscal, monetary & supply-side)
- It examines the role of the government in achieving price stability, low unemployment & a stable Current Account balance on the Balance of Payments account
- It examines the interaction of the economy with the rest of the world through international trade
