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.