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A basic difference between microeconomics and macroeconomics is that microeconomic examines the choices made by individual participants in an economy, whereas macroeconomics considers the economy's overall performance

Economics Dec 12, 2020

A basic difference between microeconomics and macroeconomics is that microeconomic examines the choices made by individual participants in an economy, whereas macroeconomics considers the economy's overall performance. Why?

Expert Solution

Microeconomics and macroeconomics are two sub-parts of economics.

Micro means small and macro means large.

Microeconomics focuses on the behavior of an individual and a single entity in the economy. 'I' in microeconomics is referred to as an individual because microeconomics is concerned about the issues related to a single individual and a firm. The main issues which are studies in microeconomics are consumer behavior, producer behavior, and market structure.

Macroeconomics studies the behavior of a whole economy in a country. 'A' in macroeconomics is referred to as aggregate because macroeconomics is the study of the aggregate behavior of individuals and firms. It focuses on issues related to a whole country such as economic growth, inflation, recession, unemployment, and many more.

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