What is the Difference Between Microeconomics and Macroeconomics

There are a number of differences between microeconomics and macroeconomics, though in general these differences come down to the scope involved with each aspect of economics. Microeconomics is concerned with individual businesses and consumers, including considerations for consumer buying habits with relation to a particular individual or one business. Macroeconomics, on the other hand, looks at the economy on a larger scale and considers the financial activities of an entire country, or numerous countries that affect each other financially. While both microeconomics and macroeconomics often involve understanding concepts such as supply and demand, these concepts are considered at vastly different scales.

Both microeconomics and macroeconomics are aspects of economics in general, and they are typically discussed together by financial analysts and financial forecasters. While there are differences between each, most effective managers and business leaders consider both when trying to understand the economy. The most basic difference between these two aspects of economics is their scale. Microeconomics deals with individual consumers or businesses and the supply and demand involved with each party; macroeconomics involves an understanding of larger economic systems and how national economies change and develop over time.

One of the biggest differences between microeconomics and macroeconomics is how equilibrium is determined and evaluated for the economy. Equilibrium in microeconomics typically comes about when supply and demand for one particular company are even. In macroeconomics, on the other hand, this equilibrium can only be achieved if the aggregate supply and demand among all businesses and consumer households iseven. Microeconomics and macroeconomics are also quite different in how supply and demand are viewed and considered. The focus in microeconomics is on supply and demand for a single product or at most the products offered by onecompany, while macroeconomics deals with aggregate supply and demand for an entire country or worldwide economy.

Most economists recognize the importance of analyzing and understanding both of these aspects of the economy. While they can be considered as different and separate components of the economy, they are also interconnected. Changes to the national economy in a country often impact individual businesses and households, such as increased interest rates that change consumer spending habits and alter resource costs for companies. It is often easiest to consider microeconomics and macroeconomics together as the way in which changes in one system affect the other: in microeconomics these changes come from the bottom up, while in macroeconomics the changes occur from the top down.

written by G. Wiesen, edited by Heather Bailey http://www.wisegeek.com/what-is-the-difference-between-microeconomics-and-macroeconomics.htm

Vocabulary Expansion

1. Match the following words in column A with their synonyms in column B

A	B
1. aggregate	a. prediction
2. affect	b. scope
3. entire	c. influence
4. alter	d. total
5. forecast	e. whole
6. scale	f. divisible by two
7. even	g. change

2. Add a word or a collocation to make an expression we use in Economics

For e.g. to determine an equilibrium

a) to determine …	d) to impact …
b) to evaluate …	e) to view …
c) to consider …	f) to analyze …

 

3. Use the expressions made in the previous exercise to complete the following sentences:

It is vital ….; it is important …; it is necessary …; it is compulsory …; it is significant …; it is easy

4. Think of an appropriate preposition to be used with the expressions:

a) demand …; b).… general; c) to be concerned …; d) consideration …;

e) to deal …; f) differences …

Language Focus: Compare and Contrast Structures

Review the grammar rules: http://www.grammar-quizzes.com/compare.htm

Compare

Both как…так и	Both Abu Dhabi and Ajman are on the coast.
Each каждый	Eachemirate has its own healthcare system.
Neither никакой	Neitheremirate has a river.
Neither …nor… Ни тот, ни другой	Neither Abu Dhabi norAjman has high mountains
	Contrast
….but…. но	Oranges are sweet but lemons are bitter.
..whereas.. тогда как	Europeans eat potatoes whereas Asians eat rice.
In contrast to в отличие от	Most Italians are Catholics, in contrast toThais who are Buddhist

Comparative

Adj + er than больше чем	Abu Dhabi is bigger than Ajman.
Much adj + er than намного больше чем	New York is much bigger than Bani Yas
Much more adj than намного более мощный чем	A Landcruiser is much more powerful than a Smartcar.
not as …….as не такой … как	Al Ain is not as humid as Abu Dhabi.

Other Words for indicating Contrast:

unlike, different from, yet, however, nevertheless, on the one hand, on the other hand, although, even though, while

Other Words for indicating Comparison:

like, just like, be similar to, be the same as, and...too, similarly, likewise, in the same way, just as, have in common, as well as

Test 2

1. Which word completes the sentence?
The car went as fast … a bullet.

a. as

b. than

c. like

2. Which word goes in the space?
You look different … your father.

a. unlike

b. as

c. from

3. What’s the best way to complete the sentence?
I’m not … my brother.

a. more hard-working as

b. as hard-working as

c. hard-working as

4. Which word can go in the space?
Our house is … as big as Robert’s house.

a. just

b. exactly

c. slightly

5. Finish the sentence.
He doesn’t cook as well as I ….

a. do cook

b. do

c. –

6. Which sentence has a different meaning?

A. Susan isn’t quite as tall as Karen.

b. Karen is almost as tall as Susan

c. Susan is nearly the same height as Karen.

7. Which word can go in the space?
Our house isn’t … as big as Jason’s.

a. just

b. slightly

c. nearly

8. Which sentence has a different meaning?

a. Tony and I are almost exactly the same weight.

b. Tony isn’t half as overweight as I am.

c. I’m just a bit heavier than Tony.

9. Which word can go in the space?
These two books are … different.

a. nearly

b. slightly

c. almost