Differences Between Micro & Macro (Cambridge (CIE) O Level Economics)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
Microeconomics and Macroeconomics
Some of the Differences Between Micro- and Macroeconomics
Microeconomics | Macroeconomics |
|---|---|
Single market e.g. milk | Entire economy e.g. singapore |
Price of a good/service | Average price levels in an economy (inflation/deflation) |
Individual/market demand | Total demand in an economy |
Individual firm/market supply | Total supply in an economy |
Government intervention in a market e.g. cigarettes | Government intervention in the economy e.g. income tax |
Reasons for differences in workers wages | Unemployment and minimum wages |
Microeconomics is the study of individual markets and sections of the economy, rather than the economy as a whole
It examines the different choices individuals, households and firms
It examines what factors influence their choices
It examines how their decisions affect the price, demand and supply of goods/services in a market
It examines how Governments influence consumption and production
Macroeconomics is the study of economic behaviour and decision making in the entire economy, rather than just an individual market
It examines the role of the government in achieving economic growth and human development through the implementation of specific government policies (fiscal, monetary and supply-side)
It examines the role of the government in achieving price stability, low unemployment and a stable Current Account balance on the Balance of Payments account
It examines the interaction of the economy with the rest of the world through international trade
Decision Makers in Micro and Macro
Decision Makers and Their Choices in Microeconomics
Decision Maker | Choices They Make |
|---|---|
Consumers |
|
Firms |
|
Government |
|
Decision Makers and Their Choices in Macroeconomics
Decision Maker | Choices They Make |
|---|---|
Consumers |
|
Firms |
|
Government |
|
Multinational corporations (MNCs) |
|
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