Nature And Scope of Micro Economics And Macro Economics - Notes - Explanation

We already studied about the “Difference Between Micro Economics And Macro Economics”, but here we will study about the Nature and Scope of both Micro Economics And Macro Economics one by one.

Micro Economics And Macro Economics Concepts / Analysis are two main and different in Nature And Scope. By Scope of Micro and Macro Economics we mean that the Economic Laws of both applicable to a selected area. For Example, the scope of Micro Economics is applicable to particular individual units, common person, particular industry sector while the scope of macro economics is applicable to a country or to whole economy of a country or at international level between two or more countries.

1. Nature And Scope of Micro Economics

(i) Nature of Micro Economics

Micro Economics deals with individuals decision making unit at a specific level. It is concerned with the welfare of individuals, particular industry of the operating in the whole economy. So, the nature of Micro Economics is to examine particular small sector of economy and not see the whole economy. For Example, we study price level of a specific product, income of a common person, individuals, specific industry, demand and supply of a product, etc.

(ii) Scope of Micro Economics

As Micro Economics is applicable to individuals and particular industrial unit, so it is the study of individual consumer behaviours or how particular industry units produce from factors of production i.e., Rent, Land, Labour, Capital and Entrepreneurship, how price of particular product or commodity is determined with the equilibrium of demand & supply in the market, etc.

Micro Economics is concerned with the welfare of individuals or industry units by utilizing of available resources optimizely to fulfill the needs of common person living in the society.

2. Nature And Scope of Macro Economics

(i) Nature of Macro Economics

The nature of Macro Economics is concerned with the economy at an aggregate level. We study the general price level of all the factors of production at aggregate level and not at particular level. We analyze National Income of a country contributed every sector of the economy during the year. We examine aggregate demand and aggregate supply of all the the industries running in a country like rice industry, sugar industry, cotton industry, etc. For Example, we study the inflation rate prevailing in the country to measure economic condition of the country.

(ii) Scope of Macro Economics

The scope of Macro Economics is applicable to whole economy operating in a country or at international level between two countries either within their own Macro Economics Laws or International Economics Laws whatever they seem to be valid.

The national trade or international trade are traded within the scope of Macro Economics. We apply Macro Economics to analyze aggregate demand & aggregate supply, National Income of a country, GDP Rate (Gross Domestic Product Rate) Inflation Rate (General Price Level), Aggregate Output and Aggregate Employment Level, etc.

So, we can say that both Micro Economics is concerned with the welfare of individuals while Macro Economics is study of welfare for the whole society. Moreover, both are applicable within the scope set by Economic Laws to analyze a particular individual units or a whole society.