[Answer] How does microeconomics differ from macroeconomics?

Answer: Microeconomics is the study of how individuals households firms and governments make choices and how those choices affect prices the allocation of resources and the well-being of other agents. On the other hand macroeconomics is the study of the economy as a whole. The scope of macroeconomics extends to the study of economy-wide phenomena like the growth rate of an economy the nation-wide unemployment rate or the inflation rate.
How does microeconomics differ from macroeconomics?

Microeconomics (from Greek prefix mikro- meaning “small” + economics) is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and …

Microeconomics (from Greek prefix mikro- meaning “small” + economics) is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure where markets fail to produce efficient results. While microeconomics focuses on firms and individuals macroeconomics focuses on the sum total of economic activity dealing with the issues of growth inflation and unemployment and with national policies relating to these issues. Microeconomics also deals with the effects of economic policies (such as changing taxation levels) on microeconomic behavior and thus on the aforementioned aspects of the economy. Particularly in the wake of the Lucas critique much of modern macroeconomic theories has been built upon microfoundations—i.e. based upon basic assumptions about micro-level behavior.

Microeconomic theory typically begins with the study of a single rational and utility maximizing individual. To economists rationality means an individual possesses stable preferences that are both complete and transitive .

Microeconomic theory typically begins with the study of a single rational and utility maximizing individual. To economists rationality means an individual possesses stable preferences that are both complete and transitive . The technical assumption that preference relations are continuous is needed to ensure the existence of a utility function . Although microeconomic theory can continue without this assumption it would make comparative statics impossible since there is no guarantee that the resulting utility function would be differentiable . Microeconomic theory progresses by defining a competitive budget set which is a subset of the consumption set . It is at this point that economists make the technical assumption that preferences are locally…

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