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Difference between Micro Economics and Macro Economics

1. Definition: Micro economics means the discussion of small parts of economics. That means the branch of economics which deals with small parts, and then it is termed as micro economics. On the other hand, the branch of economics which deals with the discussion of economy as a whole, whole of the economic activities is termed as macro economics.

2. Origin: The word Micro comes from the ancient Greek word Mikros which means small. The word Macro comes from Greek word Makros which means large.

3. Scope: Micro economics deals with different individuals and institutes separately. For this area or scope of micro economics is limited. On the other hand, macro economics deals not with individual or individual firm separately rather it deals with economy as a whole.

4. Equilibrium system: In micro economics analyzes individual or individual economic behavior, partial equilibrium. But macro economics analyzes aggregate variables such as aggregate equilibrium.

5. Variables: Micro variables are related to the units of economic system. On the other hand, macro variables are related to the whole economic system.

6. Analysis: The micro economic analysis is very critically done. The discussion of micro economics is clearer than the discussion of macro economics. But in macroeconomic as a whole, the critical and complex issues are avoided.

7. Joint variables: In macro approach, there are some variable which are sum of two or more variables. For example, National income(Y) is consumption expenditure and investment expenditure(C+1). On the other hand in micro economics each of the variables is separately related to different units of economics.

8. Interrelationship of variables: In micro economics the variables are separately analyzed. Therefore, there is no interrelationship between micro variables. But in macro variables are closely interrelated.

9. Assumptions: In micro economics the functions or relationship variable of an independent variable other things remaining unchanged is assumed. But in case of macro analysis such type of condition is not imposed.
10. Importance: In case of individual welfare or individual intuitional welfare micro economic analysis is more important. But for welfare of an economy as a whole macro economic analysis is more important.

11. Difference in Model: When reaching a decision through the analysis of a set of equations then their model is termed as micro model. But when come to a decision through the relationship between macro variables then it is termed as macro model. The micro model is related to individual units of economy. On the other hand macro model is related to the whole of economy.

12. Economic Picture: In micro analysis different small parts of economy is analyzed. For that a partial economic picture is available here. On the other hand, in macro analysis over all or as a whole economic behavior is analyzed there. Therefore, full economic status is focused there.