Micro versus Macro

Economics can be subdivided into microeconomics and macroeconomics.

The term micro means small. So, microeconomics studies the behavior of individual consumers, workers, and firms. It answers questions like 'What to produce?', 'How to produce?', and  'For whom to produce?'

For instance, a car company employs advanced techniques to create electric cars. They target environmentally conscious consumers, addressing what, how, and for whom to produce.

Microeconomics deals with demand, supply, elasticity, consumer behavior, production, and cost.

The term macro looks at the bigger picture. Instead of focusing on individual entities, macroeconomics studies the behavior of an economy as a whole, such as 'How does the overall demand for cars affect the country's economy?' Or 'How do government policies such as taxation and interest rates affect the automobile industry?'

Macroeconomics covers broader issues like aggregate demand and supply, national income, inflation, unemployment, and economic growth.

In summary, microeconomics zooms in on the decisions of individual economic factors, while macroeconomics considers the overall economic performance and policies that influence the economy.