1.6 micro and macro economics

• Microeconomics studies how individuals, households, and firms make decisions about allocation of limited resources. It focuses on specific markets and actors, analyzing individual consumer behavior, production decisions, pricing, and competition.
• Macroeconomics examines the economy as a whole, focusing on large-scale economic factors such as inflation, unemployment, national output, and the interrelations between these. It aggregates the behavior of all consumers and firms to provide an overall picture of the economy.
• Microeconomics is concerned with individual decision-makers, like firms and consumers.
• Microeconomics tends to be more specific, focusing on individual markets and decisions.
• Macroeconomics examines economy-wide phenomena, like inflation or GDP.
• Macroeconomics takes a broader perspective, analyzing the whole economic system and its performance.
• Although Micro and Macro economics are distinct, they are interdependent. What happens at the micro level affects macroeconomic outcomes, and vice versa.