1. Microeconomic theory is a branch of economics that studies the behavior of individual decision-making units such as consumers, resource owners, and business firms as well as individual markets in a free market economy.
The aim of microeconomics is to explain the determination of prices and quantities of individual goods and services. Microeconomics also considers the impact of Government regulation and taxation on individual markets. For example, microeconomics analyses the forces that determine the prices and quantities of Television sets sold. Microeconomics can be considered as the ultimate cellular structure of THEORY economics.
2. Macroeconomic theory is a study of the behavior of the economy as a whole whereby the relationship is considered between broad economic aggregates such as national income, employment and prices. The economy is disaggregated into broadly homogenous categories and determinants of the behavior of each of these aggregates are integrated to provide a model of the entire economy. Macroeconomics focuses on economic stabilization whereby government policy is used to moderate the business cycle and encourage economic growth. Macroeconomics becomes a separate topic of discussion in aftermath of John Maynard Keynes’ the Great Depression. The line between Microeconomics and macroeconomics is however blurred and there are many areas of overlap between the two.
Anganifelix answered the question on December 8, 2018 at 11:41
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