Microeconomics focuses on individual economic units (households, firms, specific markets), dealing with price determination, consumer behavior, and factor pricing. Conversely, macroeconomics examines the economy as a whole, focusing on aggregates like national income, inflation, unemployment, and government policy.
Key Features of Microeconomics (Class 12 Focus)
Study of Individual Units: Focuses on small, individual components of the economy, such as a single consumer, firm, or industry.
Price Theory: Determines the price of a specific commodity or factor of production based on demand and supply.
Partial Equilibrium: Analyzes the equilibrium of a single unit or market, assuming other factors remain constant (ceteris paribus).
Assumption of Full Employment: Generally operates under the assumption of full employment in the market.
Scope: Covers consumer behavior, product pricing, factor pricing, and economic welfare.
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