Chapter 1, Problem 10AA

To determine

To analyze:The difference between microeconomics and macroeconomics.

Explanation of Solution

Microeconomics is the analysis of decisions taken by individuals and organizations about resource distribution and the prices of goods and services. This also considers taxation, rules and policy laws.

Macroeconomics examines a country’s behavior, and how its policies impact the entire economy.

The difference between microeconomics and macroeconomics is shown below:

Micro economics	Macro economics
There are individual markets in which income of individual buyers are considered.	It considers whole economy and its GDP.
It analyzes the effect of price change on a single good.	It analyzes overall change in price level by calculating inflation.
It analyzes the effect of labor supply and demand on a single market.	It analyzes the overall employment level of the economy.
It analyzes the demand and supply of an individual good in the market.	It considers aggregate demand and overall productive capacity of the economy.