Difference Between Micro and Macro Economics | microeconomics and macroeconomics |Class 11 economics
In this video lesson, difference between micro and macro economics in detail, we've explained the difference between micro and macro economics. Along with that, you will find a description of micro economics and its subject matter. Similarly, macro economics has been discussed.
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#Meaning:Microeconomics refers to that branch
of economics which studies Individual
units of the Economy.
#Meaning:Macroeconomics refers to that branch
of economics which deals with the
economy as a whole,
Area of focus:Microeconomics focuses on the
theory of price.Macroeconomics focuses more on
theory of income and employment.
Assumption:All the macroeconomics variable are
constant.All the Microeconomics variable are
constant.
Economics
Variable:Consumer's demand and Producer's
Supply are some of Microeconomics
variable.Aggregate demand and Aggregate
supply are some of Macroeconomics
variables,
WORD:Word Micro derived from Greek
word Mikro Which means small.Word Macro derived from Greek
word Makro Which means large.
Central
Problem:price determination and
allocation of resource.Determination of level of Income
and employment.
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Difference,Between,Economics,Micro,Macro
0:00 introduction
0:42 background history of microeconomics and macroeconomics,
2:43 meaning of microeconomics.
3:08 meaning of macroeconomics.
3:37 questions for you
4:00 difference between micro and macro economics
4:19 area of focus of microeconomics
5:19 area of focus of macroeconomics
5:59 assumption in microeconomics
6:15 assumption in macroeconomics
6:30 what is economic variable
7:13 economic variable in microeconomics
7:25 economic variable in macroeconomics
7:45 the word microeconomics
8:00 the word macroeconomics
8:30 central problem of microeconomics
9:00 central problem of macroeconomics,
9:22 scope of microeconomics and macroeconomics
10:00 guys please need your support
11:00 share as much as you can
Similarities between microeconomics and macroeconomics
Although it is convenient to split up economics into two branches – microeconomics and macroeconomics, it is to some extent an artificial divide.
Micro principles are used in macroeconomics. If you study the impact of devaluation, you are likely to use same economic principles, such as the elasticity of demand to changes in price.
Micro effects macroeconomics and vice versa. If we see a rise in oil prices, this will have a significant impact on cost-push inflation. If technology reduces costs, this enables faster economic growth.
Blurring of distinction. If house prices rise, this is a micro economic effect for the housing market. But, the housing market is so influential that it could also be considered a macro-economic variable, and will influence monetary policy.
There have been efforts to use computer models of household behaviour to predict the impact on the macro economy.
Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behaviour, individual labour markets, and the theory of firms.
Macro economics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output and inflation.
Micro economics involves
Supply and demand in individual markets.
Individual consumer behaviour. e.g. Consumer choice theory
Individual labour markets – e.g. demand for labour, wage determination.
Externalities arising from production and consumption. e.g. Externalities
Macro economics involves
Monetary / fiscal policy. e.g. what effect does interest rates have on the whole economy?
Reasons for inflation and unemployment.
Economic growth
International trade and globalisation
Reasons for differences in living standards and economic growth between countries.
Government borrowing
The main differences between micro and macro economics
Small segment of economy vs whole aggregate economy.
Microeconomics works on the principle that markets soon create equilibrium. In macro economics, the economy may be in a state of disequilibrium (boom or recession) for a longer period.
There is little debate about the basic principles of micro-economics. Macro economics is more contentious. There are different schools of macro economics offering different explanations (e.g. Keynesian, Monetarist, Austrian, Real Business cycle e.t.c).
Macro economics places greater emphasis on empirical data