Microeconomics Essay

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Question #1. a. Distinguish between Microeconomics and Macroeconomics equilibrium. The main difference between macroeconomics and microeconomics is that microeconomics considering the economy from a position of individual firm and consumer and macroeconomics deals with the whole economy as a single unit. For example let’s see the diagrams of the macro- and microeconomics equilibrium: a) Microeconomics equilibrium: [pic] b) Macroeconomics equilibrium: [pic] We can see that microeconomics reviews relation between price on product and quantity of this product and its say that equilibrium on market is when there is such price level for each goods or service where supply = demand on these goods or services. And macroeconomics reviews relation between real national output and price level in country and its say that there is such price level where aggregate demand equals aggregate supply. In microeconomics, the equilibrium occurs when the quantity demanded equals the quantity supplied. In macroeconomics, on the other hand, equilibrium occurs when the aggregate demand equals aggregate supply. To sum it up, microeconomics focuses on the various factors of supply and demand, and the repercussions of these factors on the price of commodities, while macroeconomics focuses on the increase in the economic growth, and the changes in the national income So, we can make some table: |MICROECONOMICS |MACROECONOMICS | |There is a price for each good and service that will clear the market |There is a price level in economy at which the aggregate supply will | |(when supply = demand). |equals aggregate demand. | |Equilibrium

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