Meaning of Micro and Macroeconomics

The two terms"microeconomics" and "macroeconomics" were first coined and used by Ragner Frish, a german economist,in 1933.These two words have been derived from the Greek words 'mikros' which means small and 'makros' which means large. The term 'microeconomics' and 'macroeconomics' are now used to denote the two branch of economics.

Microeconomics

Microeconomics deals chiefly with the choice and decision making behavior of households,firms and industries and the relationship between prices and quantities of individual goods and services.It studies economic behavior of individual economic entities and individual economic variables.In other words,microeconomics is the study of such economic units as individuals firms and households,individual prices,wages,incomes,individual industries and individual commodities.According to K.E. Boulding, " micro economics is the study of particular firm,particular households,individual price,wage,income,industry and particular commodity."
According to Lerner, "Microeconomics consists of looking at the economy through a microscope,as it were,to see how the millions of cells in the body economic,the individuals or house holds as consumers and the individuals or firms as producers,play their part in the working of the whole economic organism."
This,microeconomics seeks to explain how an individual consumer distributes his disposable income among various goods and services,how he attains the level of maximum satisfaction, and how he reaches the point of equilibrium.Microeconomics is also concerned with how an individual firm decides,'what to produce','how to produce' and at 'what cost to produce'.He also decides, how and on what basis to determine pricing.Therefore, it is also called price theory.It is the study of each particular tree of the whole forest.It is concerned with microscopic study of various elements of the economic system and not with the system as a whole.It is the worms eye view analysis of economic variables.

Macroeconomics

Macroeconomics is concerned with the nature,relationship and behavior of such aggregate quantities and averages as national income,total consumption,savings,investments,total employment,general price level, aggregate expenditures and aggregate supply of goods and services.Since macroeconomics deals with aggregate quantities of the economy as whole,it is also called aggregate economics.R.E. Boulding writes,"Macroeconomics concerns itself with such variables as the aggregate volume of the output of an economy,with the extent to which its resources employed,with the size of national income,with the general price level."
In other words, theories of national income,consumption,saving and investment of employment,of economic growth,of business cycle and stabilization policies,of money supply and demand,and of foreign trade broadly constitute the subject matter of macroeconomics.Macroeconomics is the study of whole jungle, not of an individual tree.It is also termed as the birds eye view analysis of economic variables.It is also establishes an important relationship between movements of income and the general price level.Thus,it is also called income and employment theory.