ECON 100 Microeconomics vs Macroeconomics

St. Charles Community College
ECON 100 Survey Economics

Microeconomics	Macroeconomics
Individual Consumers and Firms. The demand and supply of individual goods and services.	The Overall Economy. The aggregate demand and aggregate supply for all goods and services.

Demand depends on:	Supply depends on:	Aggregate demand depends on:	Aggregate supply depends on:
Consumer’s expectations of the future.	Expectations of profits by firms.	Households’ expectations of the future.	Producers’ expectations of future profits.
The price of the product in question.	The price of the good or service in question	Interest rates.	Productions costs.
Household income available.	Technology.	Household income.	Economic growth.
Household accumulated wealth.	Costs of production. Labor Raw materials. Other inputs.	Household wealth.	Public policy: Business tax rates. Regulation or deregulation. Environmental policies.
Consumer tastes and preferences.	Business taxes and subsidies.	Taxes and tariffs.	Business taxes.
The price of other products.	Price of related goods.	Consumer indebtedness.	Weather.
The number of households demanding a good or service.	The number of suppliers.	The number of consumers.	The number of firms.
		Demand for foreign goods.
		World demand for domestic goods.
		Exchange rates.

Microeconomics	Macroeconomics
Equilibrium occurs when the quantity demanded equals the quantity supplied.	Equilibrium in an economy occurs when the aggregate demand equals the aggregate supply.
There is a price for each good or service that will clear the market.	There is a price level in an economy at which the aggregate demand will equal aggregate supply.

In macroeconomics:

There are no:
- Substitute goods or services.
- Complimentary goods and services.
- Normal goods and services.
- Inferior goods and services
  =>There are just “aggregate goods and services”.
Ceteris paribus is not an issue in macroeconomics.
We do not care why consumers make individual choices. We are not concerned with:
- Price elasticity of demand.
- Budget constraints of consumers.
- Marginal utility of consumers.
Firms (producers) are simply firms (producers). We do not worry about whether a firm is:
- A perfect competitor.
- A monopolist.
- In monopolistic competition.
- An oligopolist.
We do not concern ourselves with the size or behavior of the firm in macroeconomics.
We still emphasize the concept of “opportunity costs”, but we now apply that concept to whole economies or societies.
You will not hear the phrases “marginal cost” or “marginal revenue”. These two concepts are not an issue in macroeconomics.

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