Microeconomics studies individual economic decision-making units and specific markets, while macroeconomics analyzes the economy as a whole, including output, income, employment, inflation and trade. Microeconomics focuses on price determination and resource allocation, using supply and demand analysis. Macroeconomics examines macroeconomic variables such as GDP, unemployment and inflation, using tools like aggregate demand and supply. Microeconomics takes a bottom-up approach and macroeconomics a top-down one.

1. Basis for
Comparison
Microeconomics Macroeconomics
Meaning
The branch of economics that studies
the behavior of an individual
consumer, firm, family is known as
Microeconomics.
The branch of economics that studies the
behavior of the whole economy, (both
national and international) is known as
Macroeconomics.
Scope
Covers various issues like demand,
supply, product pricing, factor
pricing, production, consumption,
economic welfare, etc.
Covers various issues like, national
income, general price level, distribution,
employment, money etc.
Importance
Helpful in determining the prices of a
product along with the prices of
factors of production (land, labor,
capital, entrepreneur etc.) within the
economy.
Maintains stability in the general price
level and resolves the major problems of
the economy like inflation, deflation,
reflation, unemployment and poverty as a
whole.
Limitations
It is based on unrealistic assumptions,
i.e. In microeconomics it is assumed
that there is a full employment in the
society which is not at all possible.
It has been analyzed that 'Fallacy of
Composition' involves, which sometimes
doesn't proves true because it is possible
that what is true for aggregate may not be
true for individuals too.
Key Differences between Micro and Macro Economics
1. Microeconomics studies the particular market segment of the economy, whereas
Macroeconomics studies the whole economy, that covers several market segments.
2. Microeconomics deals with an individual product, firm, household, industry, wages,
prices, etc., while Macroeconomics deals with aggregates like national income, national
output, price level etc.
3. Microeconomics covers issues like how the price of a particular commodity will affect its
quantity demanded and quantity supplied and vice versa, while Macroeconomics covers
major issues of an economy like unemployment, monetary/ fiscal policies, poverty,
international trade etc.
4. Microeconomics determine the price of a particular commodity along with the prices of
complementary and the substitute goods, whereas the Macroeconomics is helpful in
maintaining the general price level.
5. While analyzing any economy, microeconomics takes a bottom-up approach, whereas the
macroeconomics takes a top-down approach into the consideration.

2. Microeconomics Macroeconomics
1. It is the study of individual economic units of
an economy
It is the study of economy as a whole and its
aggregates.
2. It deals with individual income, individual
prices and individual output, etc.
It deals with aggregates like national income,
general price level and national output, etc.
3. Its Central problem is price determination and
allocation of resources.
Its central problem is determination of level of
income and employment.
4. Its main tools are demand and suply of a
particular commodity/factor.
Its main tools are aggregate demand and
aggregate supply of economy as a whole.
5. It helps to solve the central problem of what,
how and for whom to produce in the economy
It helps to solve the central problem of full
employment of resources in the economy.
6. It discusses how equilibrium of a consumer, a
producer or an industry is attained.
It is concerned with the determination of
equilibrium level of incoem and employment
of the economy.
7. Price is the main determinant of
microeconomic problems.
Price is the main determinant of
microeconomic problems.
8. Examples are: individual income, individual
savings, price determination of a commodity,
individual firm's output, consumer's equilibrium.
Examples are: National income, national
savings, general price level, aggregate
demand, aggregate supply, poverty,
unemployment etc.

3. Parameter Micro Economics Macro Economics
Economic Unit It is the study of individual
economic units of an economy
It is the study of economy as a whole
and its aggregates.
Scope It deals with individual income,
individual prices and individual
output, etc.
It deals with aggregates like national
income, general price level and national
output, etc.
Central
Problem
Its Central problem is price
determination and allocation of
resources
Its central problem is determination of
level of income and employment.
Main Tools Its main tools are demand and suply
of a particular commodity/factor.
Its main tools are aggregate demand and
aggregate supply of economy as a
whole.
Use It helps to solve the central problem
of what, how and for whom to
produce in the economy
It helps to solve the central problem of
full employment of resources in the
economy.
Equilibrium
Analysis
It discusses how equilibrium of a
consumer, a producer or an industry
is attained.
It is concerned with the determination of
equilibrium level of income and
employment of the economy
Determinants Price is the main determinant of
microeconomic problems
Price is the main determinant of
microeconomic problems
Limitation It is based on unrealistic
assumptions, i.e. In microeconomics
it is assumed that there is a full
employment in the society which is
not at all possible.
It has been analyzed that 'Fallacy of
Composition' involves, which
sometimes doesn't proves true because it
is possible that what is true for
aggregate may not be true for
individuals too.
Approach While analyzing any economy,
microeconomics takes a bottom-up
approach,
The macroeconomics takes a top-down
approach into the consideration.
Examples Examples are: individual income,
individual savings, price
determination of a commodity,
individual firm's output, consumer's
equilibrium
Examples are: National income, national
savings, general price level, aggregate
demand, aggregate supply, poverty,
unemployment etc.